In the last release of our OnDemand solution, Ariba completed a makeover  of the out-of-the-box Non PO invoice workflow exception and approval  rules.  This change leveraged experience accumulated over the last 10  years  working with financial shared service organizations in North  America and Europe.


Ariba also opened up the configuration of the  workflow, so that customers striving to continuously improve could  easily fine tune the invoice routing rules as experience and usage  increase or as businesses change.  Customers are no longer solely  dependent on Ariba's services to make these changes unless the  complexity merits it.


Below are a number of best practice considerations  built into our NonPO solution. Customers are welcome to leverage some  or all of the best practices built into  the product or work with our  services organization to tailor the  workflow to align to their business  needs.

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NonPO Best Practices Considerations:


AP Exception Management prior to evaluation by business


The new approval rules position Accounts Payable exception handlers to address any exceptions before the invoice is routed to business approvers.  For non-PO invoices, the types of exceptions that generally apply involve invoices with shipping that exceeds a corporate or business unit defined threshold or amount or unknown requester. In general, these exceptions are almost always evaluated and processed by an Accounts Payable workgroup or queue.


Role of the Requester


The common practice across the Ariba customer base is to route non-PO invoices for approval to the requester identified by the supplier on the invoice. This ensures that suppliers have identified the correct recipient or coordinator of the services or goods they delivered, and that individual can verify the accuracy of the invoice.  In addition, many companies require that the requester is responsible to ensure the appropriate accounting on a non-PO invoice.  For manually entered invoices, Ariba excludes the requester from the approval flow if that individual is also the preparer of the invoice because that user’s entry of the invoice itself implies an approval of the invoice.


Role of the Supervisor


The best practice is to always have at least two approvers on every invoice: the requester and the requester’s supervisor.  When the value of the invoice exceeds the supervisor’s authorization limit, the invoice is routed to each subsequent supervisor until a business approver with the authorization limit is reached. The rational for this approach is as follows:


(1) The relationship between the supervisor and the employee reflects the underlying financial and organization structures.


(2) This approach uses the employee reporting structure in the HR or ERP system, which is often the most accurate system reflecting financial responsibilities. Many companies struggle to keep department or cost center based approval limits up to day during organizational changes.


(3) Many companies define a single authorization limit for all expense types for non-PO invoices. Especially when companies have active programs to increase PO spend, more complicated approval rules are implemented on requisitioning side only.


Role of Finance for High Value Invoice


Some companies add a final business check performed by a key set of financial users to approve any high value invoices over certain thresholds. These thresholds may vary depending on the state of business and related economic cycles, and may be different for PO-based and non-PO invoices.


If you are an Ariba procurement customer thinking about invoicing or extending your current PO invoicing solution to NonPO, please contact your customer service representative for more details.