2.1. Introduction The P&SC strategy is to move to two simple Invoicing models.

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1 BT Procurement and Supply Chain 2. Invoicing Options 2.1. Introduction The P&SC strategy is to move to two simple Invoicing models. The first will be where a discrete order or call off will be generated by BT systems providing a Purchase Order number and line number references. When a supplier has fulfilled the product and service, the supplier will invoice using these references. (i) (ii) Purchase Order reference. The purchase order reference in BT will provide the related project, contract and accounting detail required for processing and will also be used for the approval workflow within BT. This method will always be used where different individuals are required to approve the payment of discrete orders and hence this types of invoice will always have a Purchase Order. The second is where an agreement with a Supplier results in a general service where individual orders or call off are not made. Instead the supplier will invoice based on the service being provided against a metric (such as people) or asset. Examples would be electricity, gas and petroleum orders or mobile phone airtime against registered SIMS. These invoice files will need approval in BT and should only be used where there is one nominated individual or group who will authorise the processing of this information into BT s accounts. These files will not have a Purchase Order reference. Some suppliers may provide products or services that require both types of invoice. In these cases the supplier must ensure that each is invoiced separately. e.g an HR services provider may provide general HR services based on the number of people or an agreed envelope of expenditure (type (ii) above), however specific services such as tax advice, removals, training may be discrete orders requiring receipt and approval by an individual (type (i) above) BT may change between these if it is identified that a particular commodity would be provided more effectively. 1

2 way matching BT will be applying 3 way matching on Purchase Order invoice. This will mean that in addition to an Invoice matching an approved order value there will also be a check to ensure that a Receipt of the same value has been made by the Requestor regarding the product and service to ensure it is delivered to time, quality and cost. If no receipt is made any Invoice will be placed on hold and will not continue to payment until such a receipt is made. If the value of the Invoice exceeds the original Purchase Order value then an amendment to the Purchase order will be required and a revised Purchase Order sent to the supplier. The system will automatically prompt users for receipts against the need by date and again if an invoice is received and no receipt exists. However Supplier will need to ensure that they have full Purchase order cover for any change in the order or its scope and that this should be via a revised Purchase Order and should not be left until invoicing. Otherwise the Invoice may be subject to approval delay which will then delay it being passed for payment. Suppliers are reminded of BT s NO PO NO PAY policy and our contractual terms regarding the receipt of a valid and accurate invoice Invoice Options BT will in future support the submission of Invoices by Suppliers that contain a Purchase Order and Purchase Order Line references by: a) Manual Paper Invoice b) OB10 (third party exchange) c) Open File Interface (BT specification of an electronic invoice file) d) XML Invoice Message (OAG available April 2008) e) XML Invoice message (B2B integration in association with other standards late 2008) f) isupplier direct web interface to BT (June 2008) 2.4. Manual Paper Invoices BT will continue to receive invoices manually. These will be received by our accounts payable provider and scanned into an electronic image of the invoice and supporting information. This image will then be processed in conjunction with ORACLE to provide an electronic workflow to the appropriate individuals within BT including re-approval of the expenditure if required. The original invoice is destroyed after 5 weeks but the electronic image is retained for 7 years and is accessible at any time by BT people located anywhere via Markview. It is expected that most of our contracted suppliers will have sufficient volume or order value that the benefits of electronic invoicing in terms of delays, accuracy and cost, will mean that suppliers seek to move all Contracted Suppliers to move to electronic invoicing by September Therefore we ask that all contracted suppliers consider one of the electronic methods. 2

3 2.5. OB10 This is a third party provider of a B2B trading model specialising in Invoicing. The benefit to a supplier is that a single method of invoicing can be employed with a number of OB10 enabled clients. OB10 also offer low cost interfaces and print stream capture that may minimise a supplier s investment in creating electronic invoices. Although the supplier will benefit from instantaneous transmission to BT, and savings on postage, there will be a cost of subscribing to the exchange to the supplier. OB10 will provide implementation support, resolve customs and excise issues and support generally the submission of invoices to clients. BT will have the facility to receive invoices as an organisation from OB10. Therefore if a supplier is already on OB10 or would wish to subscribe to OB10 then BT will accept PO invoices submitted in this way as long as there are no other process issues or dependencies. Where the orders are created via ORACLE iprocurement (ibuy) there are no issues with the use of OB Open File Format This is a BT bespoke specification, which allows suppliers, especially with high transactional levels, to submit electronic invoice files at the agreed periodicity to BT directly. It is now only used where BT has a bespoke arrangement or needs this method to support existing order channels. Typically the supplier would transmit the files directly through BT s firewall onto the appropriate server where they will automatically be picked up for processing. Once submitted the file will be processed for the individual POs and virtual invoices created to facilitate approval by the REQUESTOR of the product or service. Suppliers will need to ensure that the file format is correct otherwise the file will be rejected. If the file is OK but the Purchase Order information is incorrect then that PO invoice will be rejected. If the number of POs being rejected hits a threshold the whole file may be rejected 2.7. XML Invoice Message (OAG) In this option the supplier will send discrete Invoices for each PO. This will allow full integration between Supplier and our ORACLE system. BT will provide the standard information required that will be included in the messages but the ORACLE OAG standard is widely available and understood XML Invoice Message (B2B Integration with BT) Where a supplier fully integrates with BT for ordering then it is envisaged the invoicing will be completed over the same mechanism. BT will be introducing a Single B2B gateway for trading with suppliers, particularly where orders originate from other systems or a mixture of systems in BT. This option is regarded as bespoke and therefore it will be discussed in detail with a supplier and either included in a tender or implemented as a project. 3

4 2.9. isupplier Web Interface For all contracted suppliers and other key organisations BT is proposing the use of isupplier Web Portal. This allows access directly from any PC with Internet access to directly connect and log into BT systems and provided the following functionality: a) View and acknowledge Purchase Orders b) Receive attachments and other documentation associated with an order c) Review the Status of Purchase Orders, Receipts. Invoices d) Review Payment status e) Submit Invoices (June 2008) This will be best practice and can either be used as the sole trading mechanism or in addition to other options. For instance you can still have a B2B interface with BT but still use isupplier to view status of invoices and payments. The use of isupplier has no technical or commercial dependencies other than setting up User IDs and Passwords. As it can apply to suppliers large or small it is regarded therefore as the universal base option as best practice for contracted suppliers Submitting Invoices messages and files to BT To submit invoices electronically the Supplier will need to provide BT with details regarding their company network and specifically a requirement for fixed IP addresses. These can be registered with our firewall team and the supplier provided with a unique secure URL. In this way a secure path through the BT firewall that can be established to submit invoices Invoices without Purchase Order references Where service is provided to BT and there is not a requirement for individually approved invoices or it is inappropriate to order using discrete Purchase Orders then the supplier will trade with BT without Purchase Orders. This may be used in any of the following situations: Ä Ä Ä where there are high volumes of non-po transactions invoicing is against a general service or metric e.g Gas, Electricity low cost commodities However this option may only be used where a single individual or team are responsible for the approval of these invoices in BT. Although each Invoice line may be against a particular budget code the invoice files submitted must be approved by a BT person prior to processing into BT accounts and payment initiated. This option must not be used where a Purchase Order has been used to order from the supplier. Where a supplier invoices against both PO and non-po orders the supplier should ensure that the invoicing is separated and the appropriate options are used for each. 4

5 Legacy Minifeed (affectionately known as One Bill) BT has had a concept of consolidated invoice files for a number of years. These invoices are processed via our new platform install first and then transactions are transferred to our current financial systems. Suppliers submitting invoices via this method should continue until advised. However, as our commodities transfer to our new processes, the supplier must be prepared to migrate to the Purchase Order invoicing options. As order channels migrate it is envisaged that at an appropriate and agreed date, suppliers will transfer from One Bill minified processes Open File Interface This is the same file format as used by the PO options however without PO references this file will be very dependant on accounting detail either provided in advance by BT or captured as part of the order process with BT. In particular are: Operational Code (OUC) Project Number Financial Analysis Code Supplier Site Code (associated with a BT contract) This is a major cause of failure if this data is incorrect or has become incorrect during the time between that of the order and the invoice. Therefore this should be considered only where the process is robust. The Purchase Order invoicing methods are the preferred option. BT has had a concept of consolidated invoice files for a number of years. These invoices are processed via our new platform install first and then transactions are transferred to our current financial systems Other Recognised Order Channels Some suppliers trade with BT via orders from other BT systems. It is BTs intention to interface these systems with ORACLE so that longer term we have a consistent Purchase Order and Invoice process. However until that can be achieved then suppliers will need to retain their current processes agreed with BT. Where invoicing is not completed via a specifically agreed Order Channel then we shall adopt the Purchase Order model. 5

6 Licensed Batch Points Not all invoices are current sent to our central Accounts Payable units. In future any invoices bearing Purchase order references must be submitted directly to the Accounts Payable address stated within the contract. Licensed Out Batch Points (LOBP) will only receive invoices directly from suppliers where there is a specific process need, where orders do not bear a PO reference and invariably where other systems are generating orders or call-offs to suppliers not associated with ORACLE. If a LOBP is necessary BT shall advise the supplier as part of the contract. IF NOT SPECIFICALLY AGREED WITH BT PROCUREMENT INVOICES MUST BE SENT TO THE ACCOUNTS PAYABLE ADDRESS STATED IN THE CONTRACT IN ALL CASES. 6