Exploit ERS Functionalities to Streamline Your Three-Way Match Processes

  • by Gaetano Altavilla, Senior SAP Practice Manager
  • August 26, 2015
Learn about the processes involved in evaluated receipt settlement (ERS) in Purchasing and get details about the main customizing settings to be done in the system.
Learning Objectives

Reading this article, you will learn how to:

  • Manage the purchasing invoices with options available in SAP for evaluated receipt settlement (ERS)
  • Manage purchases based on a vendor’s ERS capabilities, according to legal country rules and relevant options available in the SAP ERP Central Component (ECC) 6.0 system
Key Concept

Evaluated receipt settlement (ERS) is a procedure for settling goods receipts automatically. When you use ERS, you agree with the vendor that the latter will not submit an invoice in respect of a purchase order transaction. Instead, the system posts the invoice document automatically based on the data in the purchase order and goods receipts.

The three-way match consists of the process of verifying the invoice quantity versus the goods receipts quantity and the invoice price versus the purchase order price. If the tolerances established in the system are not being respected, then the invoice can either be posted but blocked for payments or not posted at all.

Evaluated receipt settlement (ERS) is an alternate way of processing vendor invoices. In this method, instead of a vendor submitting the invoices for payment, the company on its own settles the vendor liabilities and presents a payment statement. This method of payment takes the data based on purchase orders and delivered quantities to arrive at the vendor payment amount. The ERS process yields the best results when the pricing and goods receipts remain consistent with the purchase orders created. ERS is particularly suitable for creating settlement documents at regular intervals and offers the following main advantages:

  • Purchasing transactions are closed more quickly
  • Manpower to process invoices is reduced
  • Communication errors are avoided
  • Invoice variances are eliminated
  • No price and quantity variances occur in invoice verification
  • Payment to vendors is timely
Note
I recommend that you implement ERS only if you and your vendor have a clear agreement on the applicable conditions and you continuously update the purchase orders in the system.

For the process that I describe, the business activities managed in the system involve the following master data prerequisites:

  • Enable a vendor for ERS functionalities
  • Maintain a purchasing information (info) record
  • Create price condition records

The process that I describe also involves the following transactional data processes:

  • Create a purchase requisition
  • Create a purchase order
  • Post the goods receipt
  • Display the ERS postings
  • Perform the actual ERS postings
  • Verify the invoice documents created during the ERS settlements
  • Print the ERS documents

Gaetano Altavilla

Dr. Gaetano Altavilla is a senior SAP practice manager. His focus is on pre-sales, delivery of SAP application solutions for large international corporations, and SAP knowledge management in Europe, the Middle East, and Africa (EMEA).

In his 18 years of SAP application experience working for many multinational companies, such as Procter & Gamble and Hewlett-Packard, he has covered a wide range of ERP logistic areas, focusing on the MM, WM, SD, LES, PP, PP-PI, PLM (QM, PM, PS) modules, as welll as CRM (TFM), SRM (EBP), SCM (SAP APO), and MES (ME) components.

Dr. Altavilla holds a degree with first-class honors in mathematics from the University of Naples and is certified in many SAP modules: SAP Logistics Bootcamp, SAP MM, SD, LE (SHP/WM/LE), PP, PLM (PM, QM, PS), SRM, CRM, SCM (APO), SCM (TM), FI, CO, and Solution Manager. He also has experience in ABAP/4 and application link enabling (ALE) and IDocs. He has participated in numerous industry conferences, such as the SAP Skills Conference in Walldorf at SAP SE.

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Comments

9/22/2015 7:14:13 AM
Kiran

Very good structured document.

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