We are often asked about vendor invoice processing using a vendor portal. There are many different ways of automating the exchange of vendor invoices which leads to a certain amount of confusion as to how you should solve this business problem. The reason that invoices are more complex to manage than, for instance, purchase orders is that purchase orders are created in a system that you control while invoices are usually created in your vendors systems.
Since the invoices often originate in your vendors system, the complexity is in providing a means for them to transmit those invoices to you as well as to convert the invoice data from their format into your format at one end or the other of the transmission.
There are several ways that your vendors can transmit the invoices to you. Some common methods are: Direct FTP file exchange or the use of web services and the older Electronic Data Interchange (EDI). Files can also be uploaded manually using the functionality of our vendor portal, presuming that your vendors can provide the invoice data in the correct format.
Another way that your vendors can provide you with an invoice is to take a purchase order in the portal and “flip” it into an invoice. This “flipping” is a function in the portal that creates an invoice that mirrors the PO line for line and provides entry fields for the vendor to make any modifications based on specific quantities shipped etc.
There is one other way to deal with invoices presuming that you have a purchasing system that can support evaluated receipt settlement (ERS). ERS modules generate pre-matched vendor invoices within your purchasing system based on the purchase order prices as well as the amount of goods received. These invoices can then be extracted from your system and presented to your vendors for confirmation in the same way that you would send them a purchase order.
You will usually need to provide several of these methods to your vendors to allow for their different technical capabilities.