EVALUATED RECEIPT SETTLEMENT​

 What is ERS?

 

 

Think of Evaluated Receipts Settlement (ERS) as a process for your business that involves outside partners that do business without invoices. When completing an ERS transaction, a supplier will ship goods based upon an Advance Shipping Notice (ASN). Once the goods are received, the purchaser confirms the purchase order/contract, verifies the goods are in their custody, and then pays the supplier. In other words, when ERS is used, the parties agree that the vendor will not submit an invoice. Rather, an automated system posts the invoice automatically based upon the final data of a purchase order and goods receipts. The main advantage of using an ERS system is to eliminate discrepancies in invoices. Since the invoice is generated at the end of a transaction, it is more likely to contain the most accurate information.

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Key Benefits of ERS​

 

 

The concept of Evaluated Receipts Settlement – making payment based on receipt information without matching to an invoice – has been around for decades. The concept is simple: If your Purchasing Department and your suppliers can agree on details for what is being purchased and at what price, the Accounts Payable process can be all but eliminated, with payments generated automatically once ordered items are recorded as being received

A sample of ways that Power Apps can be deployed within a business includes:

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Save Time

One-step receipt and invoicing saves time and avoids data entry errors. 

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Eliminate Duplicate Entry

No need to enter accounts payable invoices because invoices will be automatically created once items are received. 

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Increase Efficiency

Automating transactions lead to greater efficiency for the payables department.

 

Enable the ERS functionality based on vendors, purchase order lines and/or purchasing trade agreement lines and let the system generate invoices.

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Important Components of a Successful ERS System

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If you are thinking of adding an ERS System to your company’s software solutions, be sure that it includes the following components. 

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Pricing Details

There should be a catalog of products that your company makes available with pricing information on each product. This will avoid price disputes down the road. 

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Purchase Order or Contracts

Remember, instead of invoices, purchase orders or contracts are used in ERS. The purchase order will specify the pricing details for the customer. A contract may be used in place of a purchase order. The point of this component is to allow the customer to get a firm idea of how much money the goods cost.

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Advanced Shipping Notice (ASN)​

The purpose of the Advance Shipping Notice (ASN) is to acknowledge that the order is being sent.

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Bill of Lading/Packing Slip

Once the goods have shipped, a packing slip or bill of lading will be included in the package to show what, exactly, the customer receives.

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Payment

Since there is no invoice and payment prior to shipment of goods, the final payment is calculated in a few steps. Once all items have been received by the customer, they will acknowledge receipt. After this has been confirmed, the customer and the company work together to collect payment.