Business process elaboration – Order to payment

Scope

The process describes how customer and supplier can provide Accounting Token elements to enable automated generation of accounting entry from the e-document is used at each step in the supply chain.

Principles

From the earliest step, which is the Order from the customer, and the Order Confirmation of the supplier, the Accounting Token is encapsulated in each business documents.

The Order Confirmation is the required starting point of the Order process for the generation of the accounting entry, coherent with generally admitted accounting principles (GAAP).

Thus, an Order Change must always be followed by an Order Confirmation to allow the correct generation of the accounting entry reflecting the confirmed Order Change.

Use case: From Accounting Token into Order to Accounting Token into Payment

The use case shows when accounting and which accounts may be concerned at both trading partners

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Use case description – Accounting Token into the Order

Identifier	From Order Process to Payment Process
Actors	Customer
Description	To provide at the ordering process the Accounting Token information of the customer needed to support accounting entries generation during the chosen steps of the supply chain process.
Pre-condition	Parties agreed to provide the Accounting Token information.
Post-conditions	The next step in the sequence to be considered for accounting entry generation must be a confirmation of the order.
Scenario	With respect to accounting principles applied accounting entry is created to record commitment into “out of balance accounts” and / or budgetary accounts.
Remarks	Considering the current general practice, SME’s do not record this kind of commitment. Implementing accounting entries from this step onward shall translate a better view of the reality in the accounts. Future web services will enable to stick business steps figures with account’s ones and consequently improve the fairness, accurateness and timeliness of accounting books.

Business process name	Accounting Token into the Order
Identifier	From Order Process to Payment Process
Actors	Supplier
Description	At the ordering process the supplier receives the Accounting Token information of the customer needed to support accounting entries generation. It is expected that the supplier sends it back during the chosen steps of the supply chain process.
Pre-condition	Parties agreed to provide the Accounting Token information.
Post-conditions	The Accounting Token received from the customer is stored to be (re-)sent to the customer when needed.
Scenario
Remarks	No influence on supplier’s accounting figures; From supplier’s accounting view, the next step in the sequence to consider for accounting entry generation must be the Order Confirmation which means a firm commitment to provide the services or goods.

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Use case description – Accounting Token into the Order confirmation

Business process name	Accounting Token into the Order confirmation.
Identifier	From Order Process to Payment Process.
Actors	Supplier
Description	The Order Confirmation contains the Accounting Token information of the customer. It possibly provides the Accounting Token information of the supplier needed to support accounting entries generation at this step supply chain process.
Pre-condition	Customer’s Accounting Token has been included into the Order message and given back. Parties agreed to provide the Accounting Token information.
Post-conditions	The value of each line and the total value of the order confirmation must be provided on the order confirmation.
Scenario	The order confirmation acts the commitment of both parties. Accounting entry possibly occurs to record commitment into “out of balance accounts” and / or budgetary accounts into accounting accounts of the supplier and those of the customer. The Accounting Token of the supplier is needed when accounting books are kept outside of the entity, e.g. at an external accounting firm.
Remarks	Considering the current general practice, SME’s do not often record commitment. Implementing accounting entries from this step onward shall translate a better view of the reality in the accounts. Future web services will enable to stick business steps figures with account’s ones and consequently improve the fairness, accurateness and timeliness of accounting books.

Business process name	Accounting Token into the Order confirmation
Identifier	From Order Process to Payment Process
Actors	Customer
Description	The Order Confirmation gives back the Accounting Token of the customer.
Pre-condition	Customer’s Accounting Token was included into the Order. Customer’s Accounting Token is reproduced without change on the Order Confirmation. The value of each line and the total value of the order confirmation must be provided on the order confirmation.
Post-conditions	Accounting entry to be generated by an appropriate software tool.
Scenario	To book commitment into “out of balance accounts” and / or budgetary accounts.
Remarks	Considering the current general practice, SME’s do not often record commitment. Implementing accounting entries from this step onward shall translate a better view of the reality in the accounts. Future web services will enable to stick business steps figures with account’s ones and consequently improve the fairness, accurateness and timeliness of accounting books.

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Use case description – Accounting Token into the Despatch Advice

Business process name	Accounting Token into the Despatch Advice
Identifier	From Order Process to Payment Process.
Actors	Supplier.
Description	The supplier confirms despatch quantities of ordered goods and possibly acts stock outflow. The Despatch Advice contains the Accounting Token information of the customer. It possibly provides the Accounting Token information of the supplier needed to support accounting entries generation at this step supply chain process.
Pre-condition	Customer’s Accounting Token has been included into the Order message and given back. Parties agreed to provide the Accounting Token information. The value of each line and the total value of the order confirmation must be provided on the order confirmation.
Post-conditions	At supplier’s accounting side, accounting entry to be possibly generated by an appropriate software tool.
Scenario	a) Stock outflow entry to be booked with a counterpart “invoice to prepare”. b) In case commitment “out of balance accounts” and / or budgetary accounts was recorded, the [complete or partial] fulfilment of the commitment is acted by reversing [totally or partially] the original entry.
Remarks

Business process name	Accounting Token into the Despatch Advice
Identifier	From Order Process to Payment Process
Actors	Customer
Description	The Despatch Advice of quantities acts the transfer of responsibility on the delivered goods. This must be translated into accounting entries. The Despatch Advice contains the Accounting Token information of the customer.
Pre-condition	Customer’s Accounting Token was included into the Order. Customer’s Accounting Token is reproduced without change on the Despatch Advice. The value of each line and the total value of the order confirmation must be provided on the Despatch Advice.
Post-conditions	Accounting entry to be generated by an appropriate software tool.
Scenario	a) Stock inflow entry to be booked with a counterpart “invoice to receive”. b) In case commitment “out of balance accounts” and / or budgetary accounts was recorded, the [complete or partial] fulfilment of the commitment is acted by reversing [totally or partially] the original entry;
Remarks

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Use case description – Accounting Token into the Normal invoice

Business process name	Accounting Token into the Normal Invoice
Identifier	From Order Process to Payment Process
Actors	Supplier
Description	The supplier produces the invoice on basis of the despatch quantities of products or services. This invoice must be translated into accounting entries and conform to fiscal requirements. The Invoice contains the Accounting Token information of the customer. It possibly provides the Accounting Token information of the supplier needed to support accounting entries generation at this step supply chain process.
Pre-condition	Customer’s Accounting Token has been included into the Order message and given back. Parties agreed to provide the Accounting Token information. The value of each line and the total value must be provided on the invoice.
Post-conditions	At supplier’s accounting side, accounting entry to be possibly generated by an appropriate software tool.
Scenario	Invoice can be produced either by the supplier or by a service provider on basis of despatch advices where values have been calculated in advance. In supplier’s accounting books, “Invoice to produce” to be balanced with individual account receivable.
Remarks

Business process name	Accounting Token into the Normal Invoice
Identifier	From Order Process to Payment Process
Actors	Customer
Description	The customer receives the invoice on basis of the despatch quantities of products or services. This invoice must be translated into accounting entries and conform to fiscal requirements. The Invoice contains the Accounting Token information of the customer.
Pre-condition	Customer’s Accounting Token is reproduced without change on Invoice
Post-conditions	Invoice is validated and approved by the right authority. Accounting entry to be generated by an appropriate software tool.
Scenario	Invoice can be produced either by the supplier or by a service provider on basis of despatch advices where values have been calculated in advance. In customer’s accounting books, “Invoice to receive” to be balanced with individual account payable.
Remarks

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Use case description – Accounting Token into the Self Billing invoice

Business process name	Accounting Token into the Self billing Invoice
Identifier	From Order Process to Payment Process
Actors	Customer
Description	The customer produces the invoice on basis of quantities received of products or services. This invoice must be translated into accounting entries and conform to fiscal requirements. The Invoice contains the Accounting Token information of the customer. It possibly provides the Accounting Token information of the supplier needed to support accounting entries generation at this step supply chain process.
Pre-condition	Customer’s Accounting Token is reproduced without change on Invoice Supplier’s Accounting Token is possibly reproduced without change on the Invoice.
Post-conditions	Accounting entry to be generated by an appropriate software tool.
Scenario	Invoice can be produced either by the customer or by a service provider on basis of despatch advices where values have been calculated in advance. In customer’s accounting books, “Invoice to receive” to be balanced with individual account payable.
Remarks

Business process name	Accounting Token into the Self billing Invoice
Identifier	From Order Process to Payment Process
Actors	Supplier
Description	The supplier receives the invoice on basis of the despatch quantities of products or services. This invoice must be translated into accounting entries and conform to fiscal requirements. The Invoice possibly contains the Accounting Token information of the supplier.
Pre-condition	Supplier’s Accounting Token is possibly reproduced without change on the Invoice.
Post-conditions	Accounting entry to be generated by an appropriate software tool.
Scenario	Invoice can be produced either by the customer or by a service provider on basis of despatch advices where values have been calculated in advance. In supplier’s accounting books, “Invoice to produce” to be balanced with individual account receivable.
Remarks

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Use case description – Accounting Token into the Remittance Advice

Business process name	Accounting Token into the Remittance Advice
Identifier	From Order Process to Payment Process
Actors	Customer
Description	The customer provides to the supplier the invoice(s) identifier(s) for which a global payment order is simultaneously transmitted to the customer’s bank. The Remittance Advice contains the Accounting Token information of the customer. The Remittance Advice possibly contains the Accounting Token information of the supplier.
Pre-condition	Customer’s Accounting Token is reproduced without change on Remittance Advice. Supplier’s Accounting Token is possibly reproduced without change on Remittance Advice.
Post-conditions	Accounting entry to be generated by an appropriate software tool.
Scenario	Amount recorded in individual Account Payable matching the detailed amounts of invoices paid. The counterpart is “Payment in Progress” (which will be balanced at receipt of the bank statement of account acting the actual payment).
Remarks

Business process name	Accounting Token into the Remittance Advice
Identifier	From Order Process to Payment Process
Actors	Supplier
Description	The supplier receives notice of the invoice(s) identifier(s) for which the customer transmits simultaneously a global payment order to his bank.
Pre-condition	Supplier’s Accounting Token is reproduced without change on the Remittance Advice.
Post-conditions	Accounting entry to be generated by an appropriate software tool.
Scenario	Entry recorded in individual Receivable Account Payable preferably matching the detailed amounts of the invoices paid. The counterpart must be Payment in Progress (which will be balanced at receipt of the bank statement of account acting the actual payment).
Remarks

Element Identification The elements below make up the Business Information Entity representing the Accounting Token based upon the existing ACC “Accounting Account. Details” as logged into Core Components Library 06B.

The BIE is repeated as many times as requested by the accounting procedure applied in the entity e.g. general account, sub account, cost accounting account, budget account, or account directly related to a specific amount on a document (e.g. insurance cost amount, additional invoice amount, transport amount, etc.)

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