Module 9 Business Process and ADempeire

Module 9 Business Process and ADempeire By Wipawii Jaraswarapan Business Consultant, ecosoft wipawii@gmail.com ADempiere ERP 1

2 Module Objectives Overall ADempiere Go through purchase cycle Purchase module Finance module (Payment) Go through sale cycle Sale module Finance module (Receipt) Hands on Report

3 Modules in ADempeire Sale Purchase Receipt / Payment Inventory Projects Manufacturing

Module 9.1 Purchase Cycle (Trading) ADempiere ERP 4

5 Purchase-to-Invoice Finance&Accounting Requester Procurement Store Finance Account 1 PR PO GRN GRN 3 Invoice Vendor 2 Dr Product Cr Not Invoice Stock Card - In Dr Payment Selection Cr Bank in Transit Dr Account Payable Cr Payment selection Dr Bank in Transit Cr Bank 4 5 6 Invoice (vendor) Payment Bank Statement GRN/PO Invoice Payment Dr Not Invoice Cr Account Payable Inventory 70 Bank -70

6 Purchase Cycle - Requisition to Invoice Purchase Cycle Steps 1 2 3 4 Create Requisition Purchase Order Material Receipt Invoice (Vendor) Open items (Finance) 5 6 Payment Bank Statement

7 Payment to Vendor ERP process 1. Payment Dr Payment selection Cr Bank in transit 2. View allocation Dr Acct Payable Cr Payment selection 3. Bank Statement Dr Bank in transit Cr Bank

Module 9.2 Sale Cycle (Trading) ADempiere ERP 9

10 Sale-to-Invoice Finance&Accounting Sales Store/Shipment Finance Accounting Proposal / Quotation 1 SO DO Invoice 2 3 Dr Cost Cr Inventory Stock Card - Out Dr Account Receivable Cr Sale x Billing Invoice/DO Billing Receipt Sale 100 Customers Dr Bank in Transit Cr Payment selection Dr Payment selection Cr Account Receivable Dr Bank Cr Bank in Transit 5 4 Receipt Bank statement Bank 100 Sale 100 Cost (70) Profit 30 Bank 30 (100 70)

11 Sale Cycle Quote to Invoice Sales Cycle Steps 1 2 3 4 5 Create Sales Order Delivery Order Invoice (Customer) Receipt Bank Statement

12 Sale Order 1 Document type 1. Proposal 2. Quotation 3. Standard Order

13 Shipment (Delivery) 2 Ways to Create document 1. Semi - Automatic 2. Automatic 3. Manual Semi-Automatic with Invoice

14 Ways to Create document Automatic Manual Self entering all data Semi - Automatic Auto generate Selecting data

15 Sales Invoice 3 Ways to Create document 1. Semi - Automatic 2. Automatic 3. Manual

16 Sale Invoice Document type 1. AR Invoice 2. AR Credit Memo

18 Receipt payment from Customer ERP process 1. Receipt Dr Bank in transit Cr Payment selection 2. View allocation Dr Payment selection Cr Acct Receivable 3. Bank Statement Dr Bank Cr Bank in transit

WORKSHOP 20

Practice Purchase Cycle (Trading) ADempiere ERP 21

22 Purchase Cycle Requisition-to-Invoice Payment Process 1 2 Create Requisition Purchase Order 1.1 Payment Selection 1.2 Payment Print/Export 3 Material Receipt 4 Invoice (Vendor) Open items (Finance) 5 Payment Auto-Gen 2.1 Payment 2.2 View allocation 6 Bank Statement 3. Bank Statement

Create Purchase Requisition (PR) Login to ADempiere as Client Username: GardenAdmin Password: GardenAdmin Role: GardenWorld Admin Client: GardenWorld Organization: HQ Create new Requisition Open Requisition window. Click New Document Type: Purchase Requisition User/Contact: GardenAdmin Date Required: 22/07/2011 Warehouse: HQ Warehouse Price List: Purchase Click Save Click Requisition Line tab to create new Line Product: Plum Tree Business Partner: Tree Farm Inc. Leave other information as default. Click Save Complete and Post Requisition Back to Requisition Tab, click on Complete button, and OK The Document Status become Completed Post the Document. Click on Posted button, you will notice that there is no Accounting Fact. Product info will record it as Reserved Quantity (Go to View and Product info) The Requisition document can be created by many ways, i.e., Manually By Running Replenishment Reports By Running MRP In this training, we only test doing it manually. 23

Create Purchase Order (PO) Create PO can be created in 3 ways 1. Manual 2. Semi Manual, use info from Requisition 3. Auto, use Create PO from Requisition process Create PO from Requisition Click on Create PO from Requisition process Requisition: <previously created PR#> Organization: HQ Warehouse: HQ Warehouse Click Start ADempeire will find all matching PR and convert them to PO. Please remember the newly created PO number, Review the newly created PO Open Purchase Order window Click on the Gird View icon to see the list new PO. Review the line item on PO Line tab. Complete and Post PO Back to Purchase Order Tab, click on Complete button, and OK The Document Status become Completed Post the Document. Click on Posted button, you will notice that there is no Accounting Fact. Product info will record it as Ordered Quantity. (Go to View and Product info) 24

25 Print Preview Purchase Order To print out the Purchase Order Form, click on Print Preview icon on Purchase Order window. User can later on, manage, print, email, export or archive as internal document. Later on we will be learning how to create and manage reports. ADempeire s Print Format Integration with Jasper Report Financial Reports

26 Material Receipt Receipt Material with PO Reference Open Material Receipt window Business Partner: Tree Farm Inc. Click Save Click Create Line From button Select Purchase Order then check on Product Line to receive. Click OK. Back to Material Receipt Tab, click on Complete button, and OK The Document Status become Completed Post the Document. Click on Posted button, and notice the Accounting Fact. DR Product Assets CR Not invoiced receipts Review the Receipt Line Click on Receipt Line tab Review the line item on Receipt Line tab. Complete and Post Material Receipt In most ERP system, we need to know the matched PO when receiving material. Otherwise, we need to contact Purchasing Department. In ADempiere ERP, in addition to that, we can also receiving material without knowledge of the PO. Then, we can do the Matching to PO later using Matching PO-Receipt-Invoice form. This give a lot of flexibility.

27 Invoice (Vendor) Invoicing with a Material Receipt reference Open Invoice (Vendor) window Click New Document Number: Tree 001-2011 Business Partner: Tree Farm Inc. Click Save Click Create Line From button Complete and Post Invoice (Vendor) Back to Invoice Tab, click on Complete button, and OK The Document Status become Completed Post the Document. Click on Posted button, and notice the Accounting Fact. DR Inventory Clearing CR Account Payable Trade Select Receipt then check on Product Line to receive. Click OK. Review the Invoice Line Click on Receipt Line tab Review the line item on Receipt Line tab. Like the material receipt activity, ADempiere has flexibility when entering an invoice from a vendor or supplier. You can create an invoice document with or without knowing the MM Receipt document reference.

28 Evaluating Matched Invoice In our example, as we create use create lines from Receipt, the Invoice and Receipted will be matched automatically. We can review it by go to Matched Invoice window. In real life, the posting should be done automatically by account posting engine and we don t have worry. But in this case, we will do it manually. Click to Post the Matched Invoice and generate Accounting Fact. Dr Not invoiced receipts Cr Inventory Clearing

29 Summary of Material Receipt and Invoice (Vendor) accounting facts Window Document Dr/Cr Description Value Material Receipt Matched Invoice MM Receipt Dr Product Asset 30 Cr Not Invoiced Receipts 30 Dr Not Invoiced Receipts 30 Cr Inventory Clearing 30 Invoice (Vendor) AP Invoice Dr Inventory Clearing 30 Cr Account Payable Trade 30 With this journal, you know that the final result of the accounting facts is debit Product Asset against credit Account Payable Trade. If this is not for Product item, but Product Service, the Account Fact will be Product Expense instead of Product Asset.

30 Outstanding Liabilities View Outstanding Liabilities Open Business Partner window Lookup for Business Partner Name = Tree Farm Inc. Review Open Balance field With this information, ADempiere tells us the value of the total liabilities that we have in the Open Balance field. The value is -30. If we have more than one invoice that belongs to this vendor, the Open Balance will sum up all of the liabilities to this vendor. In this case, we have one unpaid AP Invoice document for Tree Farm inc., which has 30 as the invoice value.

31 Purchase Cycle Payment and Bank statement Purchase Cycle Steps 1 2 3 4 Create Requisition Purchase Order Material Receipt Invoice (Vendor) Open items (Finance) 5 6 Payment Bank Statement

32 Creating Payment Proposal Create Payment Selection Open Payment Selection window Click New Name: Tree Farm PAY001 Bank Account: MoneyBank - 123456789_1234 Click Save Select invoice to pay Click Create From button Business Partner: Tree Farm, inc. Only Discount: Not Selected Only Due: Not Selected Payment Rule: <Blank> This will find the open invoice that match the criteria. Click on the OK button to proceed with a Payment Selection. In summary, in this step, we are preparing what invoices and how much to pay within this payment. Next step we will print check and complete the payment.

33 Review Payment Proposal Review Payment Selection Line Click on Payment Selection Line to view. We can, Set a full amount payment Enter a certain amount in the Payment amount field for partial payment Remove this record from the Payment Selection Line - Click on Prepare Payment button. - Overwrite Payment Rule to Check - Click OK

34 Payment Print/Export Payment Print Open Payment Print/Export process Payment Selection: Tree Farm PAY001-30.00000 Payment Rule: Check Document No: 7654321 (Bank Check No.) Click OK (If printer is attached, this will actually print out the Check for payment) During the confirmation to print a remittance advice, you can click on the Cancel button. After printing the bank check document, ADempiere internally creates an AP Payment document with a Completed status View Payment s Accounting Fact Open Payment window Lookup for Document No 7654321, this document was automatically generated by Payment Print/Export Since we do manual post this training, Post the Document. Click on Posted button, and notice the Accounting Fact. Dr Payment Selection Cr Checking In-Transfer

35 View Payment Allocation In the previous payment activity, the accounting facts or journal entry was generated by using 21300 Payment selection in the journal debit position. We have not yet touched the Account Payable account. ADempiere has its own workflow for working with AP Payment documents. After completing an AP Payment document, the system automatically generates the Payment Allocation document. As indicated by the document name, the aim of this document is to show us the AP Invoice in which the payment has been allocated. View Payment Allocation's Accounting Fact Open View Allocation window Lookup for Document with Description = Payment: 7654321 [1] Since we do manual post in this training, let s Post the Document. Click on Posted button, and notice the Accounting Fact. Dr Accounts Payable Trade Cr Payment selection

36 Summary of Payment accounting facts Window Document DR/CR Description Value View Allocation DR Accounts Payable Trade 30 CR Payment selection 30 Payment AP Payment DR Payment Selection 30 CR Checking In-Transfer 30 With this journal, you know that the final result of the accounting facts is debit Account Payable Trade. against credit Checking In-Transfer We will see in the next step, Bank Statement, how this value will be deducted from our asset (Bank Account in this case).

37 Bank Statement Create Bank Statement Open Bank Statement window Click New Organization: HQ Bank Account: MoneyBank - 123456789_1234 Name field: First Bank Statement. Beginning Balance: 1,500 Click Save Click on Create Lines from tab Select Doc No. 7654321 Click Save Complete and Post Bank Statement Back to Bank Statement Tab, click on Complete button, and OK The Document Status become Completed Post the Document. Click on Posted button, and notice the Accounting Fact. Dr Checking Account Cr Checking In-Transfer With your real company bank statement data, you will enter all of the bank statements and perform the necessary reconciliation.

38 Summary of Payment accounting facts Window Document DR/CR Description Value View Allocation DR Accounts Payable Trade 30 CR Payment selection 30 Payment AP Payment DR Payment Selection 30 CR Checking In-Transfer 30 Bank Statement DR Checking In-Transfer 30 CR Checking Account 30 As you can see here, the Payment Selection and Checking In-Transfer are in transit or clearing account that could be swept out for the final journal entry format and the final result of the accounting facts is Dr Account Payable with Cr Checking Account.

Test Sales Cycle (Trading) ADempiere ERP 39

40 Sale Cycle Case 1 (Sale-to-Invoice) Case: Sell Plum tree1 each to Business Partner, Patio Fun, Inc. at Price = 45 USD and please check the accounting view for every steps. Sales Cycle Steps 1. Create Sales Order 2.1 Generate Shipments (manual) 2.2 Shipment (customer) 2.1 Generate Invoices (manual) 2.2 Invoice (customer) Requirement Document Type :Standard Order 2.1 Document Action: Prepare 2.2 Review, Complete and Post 2.1 Document Action: Prepare 2.2 Review, Complete and Post

41 Sale Cycle Case 1 (Sale-to-Invoice) Expectation: Sales Order Shipment: Invoice (Customer)

42 Sale Cycle Case 2 (Receipt payment from customer) Case: Receipt money 45 USD from Business Partner, Patio Fun, Inc., for selling Plum tree 1 each and please check the accounting view for every steps. Note: This is a next step for previous invoice

43 Receipt payment from Customer Payment Tab: - Document Type: AR Receipt - Business Partner: Patio Fun Inc. - Payment amount: 45 Allocation Tab: - Invoice: Select Invoice number - Auto gen, please post account - Bank account: MoneyBank - 123456789_1234 -- Name: Patio -- Beginning Balance = 1,470.60

44 Sale Cycle Case 2 (Receipt payment from customer) Expectation: Payment View allocation Bank statement: Bank balance = 1,515.60

Report ADempiere ERP 45

46 Summary Transactions Purchase Account Debit Credit Material Receipt 14120 - Product asset 30 21190 - Not invoiced receipts 30 Invoice (vendor) 51400 - Inventory Clearing 30 21101 - Tree Farm Payable 30 Matched invoices 21190 - Not invoiced receipts 30 51400 - Inventory Clearing 30 Payment 21300 - Payment selection 30 11110 - Checking In-Transfer 30 View allocation 21101 - Tree Farm Payable 30 21300 - Payment selection 30 Sales Account Debit Credit Shipment 51100 - Product CoGs 30 14120 - Product asset 30 Invoice (customer) 41000 - Trade Revenue 45 12110 - Account Receivable - Trade 45 Payment 11110 - Checking In-Transfer 45 11130 - Checking Unallocated Receipt 45 View allocation 11130 - Checking Unallocated Receipt 45 12110 - Account Receivable - Trade 45 Bank statement 11100 - Checking Account 45 11110 - Checking In-Transfer 45 Bank statement 11100 - Checking Account 30 11110 - Checking In-Transfer 30

47 Summary Transactions sorted by Account Balance Account Debit Credit 11100 - Checking Account 30 11100 - Checking Account 45 11110 - Checking In-Transfer 30 11110 - Checking In-Transfer 30 11110 - Checking In-Transfer 45 11110 - Checking In-Transfer 45 11130 - Checking Unallocated Receipt 45 11130 - Checking Unallocated Receipt 45 12110 - Account Receivable - Trade 45 12110 - Account Receivable - Trade 45 14120 - Product asset 30 14120 - Product asset 30 21101 - Tree Farm Payable 30 21101 - Tree Farm Payable 30 21190 - Not invoiced receipts 30 21190 - Not invoiced receipts 30 21300 - Payment selection 30 21300 - Payment selection 30 41000 - Trade Revenue 45 51100 - Product CoGs 30 51400 - Inventory Clearing 30 Debit 15 0 0 0 0 0 0 0 0 30 0 Credit 0 0 0 0 0 0 0 0 0 45 GardenWorld Trial Balance Balance Account Debit Credit Debit Credi t 11100 - Checking Account 45 30 15 11110 - Checking In-Transfer 30 30 0 11130 - Checking Unallocated Receipt 45 45 0 12110 - Account Receivable - Trade 45 45 0 14120 - Product asset 30 30 0 21101 - Tree Farm Payable 30 30 0 21190 - Not invoiced receipts 30 30 0 21300 - Payment selection 30 30 0 21300 - Payment selection 30 30 0 41000 - Trade Revenue 0 45 45 51100 - Product CoGs 30 0 30 51400 - Inventory Clearing 30 30 0 375 375 45 45 51400 - Inventory Clearing 30 0