Multicompany purchase invoice matching

Multicompany purchase invoice matching is needed to support:

• The use of a shared service center for Accounts Payable

  Central handling of purchase invoice entry, invoice matching and payment for multiple financial companies.

• VAT registration in multiple EU countries

  If a company’s activities that are subject to value added tax (VAT) in an EU country other than the member country in which the company is registered exceed a specified threshold, the company is legally obliged to be VAT registered in that other EU country.

  In a multicompany structure, a dedicated financial company is created for each foreign VAT registration. Usually, the purchase offices in which the purchase orders are entered are not linked to such financial companies.

  If the purchase invoice matching can be performed in the ‘VAT registration companies’, the costs of the purchase order are automatically charged to the company of the purchase office. If this matching scenario is used, it is no longer necessary to create an internal invoice between the two financial companies.

Posting principles

The posting principles that apply to this method of purchase invoice matching are as follows:

• The costs directly related to the purchase order and/or inventory are posted in the financial company of the purchase office. Some examples are the price variance, the FTP result, and additional costs posted at matching.
• The results from the open entry are posted in the financial company in which the purchase invoice is registered and matched. Some examples are the currency result, the payment discount, the late payment surcharge, the payment difference.

Purchase invoice matching setup

To support the two purposes a very flexible purchase invoice matching setup is required, as follows:

• A shared service center for Accounts Payable requires a setup in which the orders from purchase offices linked to a number of financial companies are all matched to the purchase invoices in one financial company: a many to one relationship.
• VAT registration in multiple EU countries requires a setup in which the purchase invoices in various ‘VAT registration companies’ can be matched to purchase orders from purchase offices that are linked to any of the financial companies in the multicompany structure: a many to many relationship.

Multicompany purchase invoice processing

In a multicompany structure, the following rules apply to purchase invoice matching.

• Order-related purchase invoices

  The following applies to order-related purchase invoices including self-billed invoices:

  • A purchase invoice can be entered in any financial company that shares the required tables with the financial company of the purchase office. During invoice matching, LN offers only those orders and receipts that are linked to the financial company in which you match the invoice.
  • Additional costs posted during matching are by default posted in the financial company of the purchase office. If these costs must be posted in the financial company in which you match the invoice, you can enter the company number in the Target Company field in the Matched Purchase Invoice/Statement Line Transactions (tfacp1133s000) session. VAT is considered to be related to the invoice and is therefore posted in the financial company in which you match the invoice. An exception is non-refundable tax (expense tax), which is considered as a cost related to the order and is posted in the financial company of the purchase office.
  • Cost items are considered to be related to the purchase order and are posted in the financial company of the purchase office. The expense account for cost items can be specified at the order entry or at purchase invoice entry. In the latter case, the costs are first posted to an interim account in the financial company of the purchase office. In teh Accounts Payable module, the costs can be posted to specific expense accounts. In the financial company of the purchase office, the interim account must then be reversed. By default, the costs are posted to the actual expense accounts for the financial company of the purchase office. You can change the company number in the Matched Purchase Invoice/Statement Line Transactions (tfacp1133s000) session.

• Cost invoices

  Cost invoices can be registered in any financial company. In the transaction details, you can associate a financial company with the cost account. This triggers the generation of an intercompany entry to transfer the costs to the correct financial company.