Settlement and
Invoicing in OTM
Jai Shahpuri
High Level Overview of Settlement in OTM
• Settlement is a very vast subject…
• Carriers expect to be paid once the promised service has been conducted
• Usually the carrier contract dictates at what point in a Shipments
• Usually the carrier contract dictates at what point in a Shipments lifecycle does the payment process start
• Commonly carriers are paid once a Shipment has been delivered
• Rail carriers tend to bill upon receiving the Shipment Tender with payment due according to negotiated terms
• OTM’s processes do not allow for invoice to be created/matched until shipment has at least been tendered
Types of Settlement Processes
Match Pay vs.
Auto Pay
Match Pay
• The Shipment is Rated based on Carrier rates
• The Carrier/Service Provider sends an Invoice
• The invoice is ‘entered’ into OTM
Auto Pay
• The Shipment is Rated based on Carrier rates
• The Invoice is
automatically created with the same cost
• Invoice is automatically into OTM • The ‘Matching’ Shipment is found in OTM • Approval ‘Tolerance Levels’ are checked
• Invoice is Approved
• The Vouched is
generated and send to the A/P system for payment
• Invoice is automatically Approved
• The Vouched is generated and send to the A/P
Match Process
•
Carrier sends the Invoice to OTM
o
Invoice can be sent via Interface or manually entered
•
OTM will ‘Match’ the Invoice to its related Shipment
•
Criteria is specified in the Match Rule
•
Matching is done based on:
Carrier (Carrier ID or Carrier Alias(s))
o
Carrier (Carrier ID or Carrier Alias(s))
oReference Number(s)
o
Source and Destination Locations
•
Additional Matching criterion can also be applied such as
matching invoice to Shipment, Ship Unit or Ship Unit Line
Match Pay Process
•
OTM ‘waits’ for the carrier to send the Invoice
Invoices sent to OTM Matching Shipments
Note: Financial amounts are NOT
CONSIDERED during the Match
Pay (Approval) Process
•
Once the Invoices have been ‘matched’ to their respective
Shipments, OTM will check the amounts
•
The Invoice amount is compared to the Shipment amount
•
If the two amounts are within the specified ‘Tolerance’, OTM
will approve the Invoice
o
Once Approved, a Voucher is created from the Invoice
oOnce Approved, a Voucher is created from the Invoice
•
If the two amounts are not within the specified tolerance, the
Invoice Approval will fail
Match Pay Process
•
Tolerance check between Shipment and its Match Invoice
Match Pay Challenges
Pros:
• Very robust process
• Forces financial and accounting discipline on the carrier Cons:
• Entering Invoices into OTM
• Incorrect ‘Matching’ reference numbers Repeated ‘Matching’ reference numbers
• Repeated ‘Matching’ reference numbers
• Incorrect Cost on Invoices
o Wrong rates
o Wrong or Missed Accessorial Costs
o Incorrect dates causing Fuel and Rate discrepancies o Missed consolidation
Auto Pay process
• The Shipment is Rated based on Carrier rates
• OTM creates the Invoice automatically upon reaching a certain point in the Shipments Lifecycle (say Shipment Delivery)
• The Invoice created is ‘attached’ to the Shipment, effectively is pre-matched
• The Invoice amounts are identical to the Shipment costThe Invoice amounts are identical to the Shipment cost
• Based on policy, once the Invoice is approved, a Voucher is created and sent to A/P for payment
Auto Pay Challenges
Pros:
•
Simpler to setup
•
Reduced need for extensive integrations
•
Works well for smaller Carriers
Cons:
•
Much more rudimentary process
•
Much more rudimentary process
•
Missed Carrier charges, e.g. Accessorials, Detention Charge etc
•
Incorrect Rates are not caught immediately
How to Run the Pay Process
• Match Carriers:
o Auto Match Invoices agent action based on trigger (say Invoice
creation)
o Scheduled recurring process to run agent
o Schedule Process All Invoices (Matches and Approves)
• Auto Pay Carriers:
Schedule Generate All Auto-Pay Invoices
o Schedule Generate All Auto-Pay Invoices o Scheduled recurring process to run agent
• Approval of Invoices:
o Auto Approve Invoices agent action based on trigger (say Auto
Match)
o Scheduled recurring process to run agent
Payment Adjustments
•
Once an Invoice has been approved and paid (Voucher
transmitted to A/P), the Voucher cannot be changed
•
Payment Adjustments can be done in a couple of ways:
o
Make changes to the Shipment Financials
oPropagate Changes to the Invoice
Create new Adjustment Voucher
o
Create new Adjustment Voucher
OR
o
Make changes to the Shipment Financials
oCreate new Adjustment Invoice
Testing (Match Pay)
• Normal Scenarios:
o Invoice with correct Carrier ID and matching RefNums matches
successfully
o Invoice with amounts within set Tolerance approves
automatically
• Exception Scenarios:
o Incorrect Matching criteria (ServProv ID, Alias, Refnum, Locations
etc) etc)
o Invoice matching to multiple Shipments
o Multiple Invoices matching to same Shipment o Out of Tolerance invoice amounts
o Rounding errors, one penny above or below tolerance o Shipment amount/data adjustments
o Invoice amount/data adjustments o Line level tolerances
Testing (Auto Pay)
•
Normal Scenarios:
o
Create Invoice and approve successfully
•
Exception Scenarios:
o
Shipment amount adjustments
oInvoice amount adjustments
Testing (Integration)
•
Normal Scenarios:
o
Receive Invoice from Carrier
o
Successfully send approved Voucher to A/P
•
Exception Scenarios:
o
Invoice adjustments from Carriers (Update existing Invoice)
Multiple Invoices for the same Shipment received from
o
Multiple Invoices for the same Shipment received from
Carriers
o
Send adjustment Vouchers to A/P (Multiple Vouchers for
Other Use Cases
•
Matching based on multiple Refnums
Qualifiers
•
Matching based on all Values of a
Refnum Qualifier
•
Line Level Approval
•
Line Level Approval
•
Parent Service Provider Invoicing for
multiple OTM Service Providers
•
Match and Approve by Accessorial
Code
Questions?
Jai Shahpuri
Jai Shahpuri
Cell: (312) 523 5044
