digital transformation: jde voucher match automation

Digital Transformation: JDE Voucher Match Automation/Optical Character Recognition

Pat Hammen – Renewable Energy Group

Seth Chaikin – Grant Thornton

August 2018

© Grant Thornton LLP | All rights reserved | U.S. member firm of Grant Thornton International Ltd

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Agenda

• About Grant Thornton

• About Renewable Energy Group

• Optical character recognition overview

• Voucher match automation overview

• How REG is leveraging OCR/VMA

• Things to consider when implementing

About Grant Thornton


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About Renewable Energy

Group


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About REGRenewable Energy Group is leading the transformation of biofuel into something that helps improve the

environment and grow customers’ profits. By pushing fuel forward, we are delivering cleaner fuels to meet

growing global demand.


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About REG – HistoryThe roots of Renewable Energy Group go back more than

two decades to when we operated under the umbrella of

West Central Cooperative in Ralston, Iowa.

Our history parallels that of the biodiesel industry as a

whole: When we made our first batch of biodiesel in 1996,

the industry was still in its early stages, a niche market with

a potential few foresaw.

While our leaders grew the company carefully and

consistently by finding opportunity within challenges, they

also advocated for the biodiesel industry as a whole, often

working with competitors for the greater good.

Today, REG is the largest biodiesel producer by volume in

the United States — as well as a producer and supplier of

many other products — and continues to contribute

resources and leadership to biofuel advocacy groups

worldwide.


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About REG – Locations Renewable Energy Group is a global company — and a local one. With locations throughout the U.S. and in

Europe, we are a player on the world stage when it comes to cleaner fuels.

What is OCR?

Optical character recognition overview


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Optical character recognition (OCR)Optical character recognition is:

• The mechanical or electronic conversion of

images of typed, handwritten or printed text

• Into machine-encoded text

• From a scanned document, a photo of a

document, a screen shot or from subtitle text

superimposed on an image


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Optical character recognition (OCR)• OCR often consists of a normal scanner and some special software

• The scanner is used to scan text on a document or piece of paper into the computer

• The OCR software then examines the page and changes the letters into a form that

can be edited or processed by a normal word processing package

• The ability to scan the characters accurately depends on how clear the writing is

• Scanners have been improved to be able to read different styles and sizes of text as

well as handwriting

• Although this is often up to 95% accurate, any text scanned with OCR needs careful

review to identify errors


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Optical character recognition (OCR)


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Optical character recognition (OCR)Advantages

• OCR information can be read with high degree of

accuracy

• Flatbed scanners are very accurate and can

produce reasonably high quality images

• The processing of OCR information is fast

• Large quantities of text can be input quickly

• A paper based form can be turned into an

electronic form which is easy to store or send by

mail

• It is cheaper than paying someone amount to

manually enter large amount of text data

• It removes a great deal of manual effort for users

• The latest software can re-create tables as well

as original layout

Disadvantages

• OCR text works well with printed text primarily

and not with handwritten text. Handwriting can

be learned by the computer

• OCR systems are expensive

• Images produced by scanner consume lot of

memory space

• Images lose some quality during scanning and

digitizing process

• Quality of the final image depends on quality of

the original image

• All the documents need to be checked over

carefully and then manually corrected

What is VMA?

Voucher match automation overview


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Voucher match automation (VMA)• Voucher match automation is JDE functionality that:

• Allows for automation of the 3 way match process

• Supports voucher logging

• Allows for the creation of one voucher per invoice or a

voucher per line on each invoice

• Has a suggest option (similar to running in proof), that

suggests matches for receipt and invoice lines prior to

matching

• Voucher Match Process Workbench program is used to

(P4314WB) to review and manage the suggested

matches

• Suggestions created based on the setup in the supplier

master and the processing options in the VMA UBEs

• Allows for specifying whether to apply tolerance on receipts

with an amount greater than the invoice amount


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VMA Overview• Standard process:


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VMA Overview• VMA process:


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VMA Setup• Vendor Master Setup:


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Automation Rules• Automation rules determine the guidelines that the process uses to match invoice lines to receipts

and purchase orders, such as matching multiple receipts to an invoice line or allowing or disallowing standard or rounding tolerance

• There are 6 options to choose

• This should be defined on the Supplier Master record for each supplier, or can be defaulted in based on the setup for the F0411Z1

• If no valid automation rule exists in the F0411Z1 record or in the supplier master record, then the VMA process issues an error message and does not attempt to match the F0411Z1 record to receipts and purchase orders


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Automation Rules


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Automation Rules• Rule 01

• Each invoice line received from the supplier is matched to a single purchase order line and a single receipt line

• The amounts must match exactly between the invoice, purchase order, and receipt lines

• The supplier must ship the entire quantity on a purchase order line together and must invoice the entire

quantity on a purchase order line as one line on the invoice

• No tolerance limits apply or rounding issues are allowed.


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• Each invoice line received from the supplier is matched to a single receipt line

• The amount of the invoice line and the receipt line can be different based on allowed standard tolerance limits

• The supplier can ship a purchase order line in multiple shipments, then invoice for each shipment for each

purchase order line

• Prices are set, but can vary based on allowed standard tolerance limits


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• Each invoice line received from the supplier is matched to a single purchase order line and to the total of one

or more receipt lines for the purchase order

• The amount of the invoice line and the purchase order line can be different based on allowed standard

tolerance limits

• The supplier can ship a purchase order line in multiple shipments, but must invoice the entire quantity of one

purchase order line in one invoice line

• Prices are set, but can be variable based on allowed standard tolerance limits


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• Each invoice line received from the supplier is matched to a single receipt line

• The amount of the invoice line and the receipt line must match exactly

• The supplier can ship a purchase order line in multiple shipments then invoice for each shipment for each

purchase order line

• No tolerance limits apply or rounding issues are allowed


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• Each invoice line received from the supplier is matched to a single purchase order line and to the total of one

or more receipt lines for the purchase order

• The amount of the invoice line and the purchase order line can be different based on allowed rounding

tolerance limits

• The supplier can ship a purchase order line in multiple shipments, but must invoice the entire quantity of one

purchase order line in one invoice line

• Prices are set, but can be variable based on allowed rounding tolerance limits


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• Each invoice line received from the supplier will be matched to multiple receipt lines, which can be on multiple

purchase orders

• The amounts must exactly match to these receipts; no tolerance or rounding issues may exist.

• The process runs an algorithm that attempts to find matches between various combinations of receipt lines to

match the invoice line amount

• If the process does not find an exact match between the invoice line and one or more receipt lines, then the

process skips to the next invoice line in the data set and begins the algorithm again


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Automation Rules


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Running VMA – Mode • Proof mode:

• Enables you to determine the matches proposed by the system by setting values in the supplier master record,

setting processing options, and using data selection

• Enables you to view a report of the proposed matches

• Does not reserve the receipt records for the invoices

• All receipt records remain available to match to other invoice lines


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Running VMA – Mode • Suggest mode:

• Enables you to determine the suggested matches by setting values in the supplier master record, setting

processing options, and using data selection

• Enables you to review the suggested matches in the Voucher Match Process Workbench program (P4314WB)

and approve, reject, modify, and process matches suggested by the system

• When you process matches in the Voucher Match Process Workbench program, you create the final records

using the same validations that the system uses when you run the Voucher Match Automation UBE programs

in final mode. You can also run the Voucher Match Automation Driver UBE to process the suggestions that you

approved in the workbench

• Reserves the receipt records for suggested matches

• If records are in use by the voucher match automation process, such as when a record is at a status of

suggested, rejected, or approved, you cannot create other suggestions or matches for the records unless you

clear the suggestion in the workbench. Clearing the suggestion releases the record reservation

• Enables you to view a report of the suggested matches


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Running VMA – Mode • Final mode:

• Enables you to determine the matches proposed by the system by setting values in the supplier master record,

setting processing options, and using data selection

• Enables you to match receipt lines to invoice lines based on the matches that the process determines, and

write records to the database tables

• Enables you to complete the match for approved suggestions


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Running VMA – Workbench• The Voucher Match Process Workbench program is used to manage records for which you used the

VMA programs to create suggested matches, and to work with records for which suggestions were

not created


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Running VMA – Workbench


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OCR / VMA at REG• Invoice match status designates where in the process the invoice is. The current status of the record

determines the actions that you can perform:

• Blank: Unprocessed

• 1: Suggested – have been matched to receipt records in suggest mode and you have not changed the status

• 2: Rejected – the suggested match between an invoice and receipt record has been rejected by a user. The system

maintains the record reservation for the receipt lines (until cleared) so that they cannot be matched to other invoices

• 3: Approved – suggested matches are approved when you use the option to approve the match. After you approve

matches, you must complete the match, either in the Voucher Match Process Workbench program or by running the

VMA process

• 4: Successfully Matched After Suggestion – the system assigns this invoice match status after an approved

suggestion is processed to complete the match

• 5: Successfully Matched Without Suggestion – the system assigns this status for records that it matches when you

run the VMA UBEs (R4304016, R4304020, and R4304021) in final mode for unprocessed records (unprocessed records

are those for which no suggestion was made, or those for which a suggestion was made and then cleared)

• 6: Manually Match – the system assigns this status to the invoice record when you select the Manually Match action for

a record. If you select this action, you cannot match the invoice line to a receipt and purchase order in the Voucher

Match Process Workbench program or the VMA process. You must use the Voucher Match program (P4314) to match

the invoice line to a receipt line

How REG is leveraging OCR/VMA


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REG OCR/VMA Process• Invoices are emailed to the AP Inbox as one invoice per PDF. Preferably new

vendors invoice REG one load per invoice

• The A/P team sends the invoice through OCR, which will label the values

listed below• Supplier Number

• Supplier Name

• Invoice Number

• Company

• Invoice Amount

• Invoice Date

• PO Number

• PCD Number (if PO isn’t available)


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REG OCR/VMA Process• AP – Procurement Receipts Review: Starting queue for invoices where a script runs every 30

minutes. The script looks for a line that matches quantity and amount extracted from the invoice that

is received into JD Edwards.

• Match Found: The invoice will route out of AP – Procurement Receipt Review and will be

entered automatically in JDE

• Match NOT Found: If the PO is created, the business unit is updated. If the PO is NOT created,

manual review is required

• AP – Procurement Review: Invoices are sent to this queue by printing via the ImageNow printer or

manually routing. This should be used for invoices that the PO won’t match the invoice, or common

issues listed below

• AP – Thirds Party RINS Review: Third party invoices needing approval from the RINS department


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REG OCR/VMA ProcessPrinting Invoices into Perceptive Content

• Procurement – Submit to OCR: The invoice will go through OCR to label

the values listed above

• Once labeled the invoice will be automatically routed to AP – Procurement

Receipt Review

• When printing the invoice, it’s required to pick an invoice type, which will

determine how the invoice is routed through the workflow

• FEED_STOCK: Inventory invoices using a PCD, or PO, number

• PRE_PAY: Invoices being prepaid before the PO has been received in

• BOL_LOOKUP: Invoices where the PO isn’t on the invoice, but the BOL is

entered in the supplier remark in JDE.

• CHEMICALS: Chemical invoices such as Interstate Chemical, Brenntag, & EP

Minerals

• Procurement – Procurement Review: The invoice will bypass OCR and

print into AP – Procurement Review. This should be used for invoices with

issues


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REG OCR/VMA ProcessOpen the Eform

• Go to “View” -> “Forms”. The Eform will show up on the bottom of the

invoice, select the word “Form” and drag the window to the wanted

location


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REG OCR/VMA Process• If the invoice was indexed, the following fields will be populated on the Eform

• Order Number

• Supplier Number

• Invoice Number

• Gross Amount

• Invoice Date

• Payment Remarks

• Once the PO line has been received into JD Edwards, select the magnify glass next to the “Order

Number”

• Search for the PO, and select ok

• For multiple POs, click the magnify glass again and search for another PO. This will bring in the line

details for both POs

• There are two scenarios if the no PO shows up when searching…

• PO isn’t received into JD Edwards

• The “Supplier Number” on the Eform may be different then the supplier number on the PO. Click the “X” next to

“Order Number” to clear the order number, supplier number, company, and business unit

•


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REG OCR/VMA Process• The PO will filter in the following information:

• Supplier Address

• Order Type

• Company

• Business Unit

• Due Date (based on the payment terms in address book)

• Line Details

• If there are multiple PO lines received into JD Edwards for multiple invoices, click the

“Deselect Lines” button

• Select the appropriate lines for the invoice

• Route forward to AP - Validation


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REG OCR/VMA Process


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REG OCR/VMA ProcessSend to JDE for VMA processing

• Batch file of invoices created and

sent to SOA Suites

• Sent from SOA to JDE and loaded to

JDE zfiles

• Zfile processed via VMA to auto-

create the related vouchers

• REG success rate is impacted by

• Customization of tax lines: Inventory

tax lines are a 2 Way Match, while

the product line is a 3 Way Match

and VMA currently doesn’t recognize

using both as once

• Intercompany entry isn’t automated


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REG OCR/VMA ProcessCommon Issues: All invoice exceptions are routed to AP – Manual Entry

• Incorrect Quantity: Enter the order number on the Eform and annotate on the invoice to adjust the

amount.

• Incorrect Amount: Enter the order number on the Eform and annotate on the invoice to adjust the

amount.

• Multiple Companies: Annotate on the invoice the PO & total amount for each company

• Prepay: Annotate the Company, PO, and Vendor Number.

• True-Ups: Copy the necessary invoice, and leave it in AP – Procurement Review

• Approvals: Any invoice needing approvals should happen in the queue AP – Procurement Review


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Questions


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Contact

Seth ChaikinManaging Director, Business

Applications

T: 913-522-6828

E: [email protected]

Pat HammenCIO, Renewable Energy Group


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digital transformation: jde voucher match automation

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