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Process 117

in the purchase order, then the material master must be updated to refl ect
this discrepancy, if the moving average price is used for price control. Recall
that when a goods receipt is recorded, the quantity, value, and moving aver-
age price are updated in the material master. When an invoice is received
and the price is different from the one listed in the purchase order, the mate-
rial value and moving average price must be adjusted to refl ect the new
values.
Invoice verifi cation provides the linkage between materials management
and accounting. It authorizes payment of the invoice to the vendor, which is
the next—and fi nal—step in the procurement process.

Demo 4.10: Receive and verify an invoice

PAYMENT PROCESSING
Figure 4-29 diagrams the elements of the fi nal step in the procurement
process—namely, paying the vendor. This step is triggered by the receipt and
verifi cation of an invoice.

Figure 4-29: Elements of the payment step

Payments can be made manually or automatically via a payment pro-
gram. Typically, an organization will have a number of invoices to pay, and the
most common method is to execute a payment program periodically, such as
daily or weekly. The program will retrieve all authorized invoices over a speci-
fi ed timeframe and automatically create payments.

Data
Figure 4-30 highlights the data needed to process vendor payments. Data from
the invoice include the date, the vendor number, and the invoice amount. In
addition, payment terms, method, and address are obtained from the vendor
master. The dates of the invoices are compared with the payment terms and
the date of the next scheduled run of the payment program in order to deter-
mine which invoices are due for payment.

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