How to use Proforma Plans for recurring invoices
Proforma Plans can help you automate the payment of recurring invoices and credit notes for spend types where you can predict the amount, content, and frequency. Examples of recurring invoices include phone bills, utilities, leasing agreements, licenses, rent, etc. This type of invoicing is often referred to as contract matching or payment plans. Through Proforma Plans you can control the frequency, amount, and budgets for recurring invoices. If any of the invoices do not correspond to these controls, then alerts can be configured.
Unlike regular Purchase Orders (POs), the invoices related to a Proforma Plan don’t necessarily contain the respective PO references. However, the invoices will automatically be identified and mapped to the respective order lines based on qualifiers.
What is a Proforma Plan?
A Proforma Plan is a regular PO with an additional layer to increase automation of recurring and predicted invoices. Apart from the details captured in a regular PO, additional data can be captured on the related Proforma Plans, like:
- Qualifiers, which enable automatic association and pairing of the order to an incoming invoice, even though the invoice doesn’t contain any order reference
- Schedule details, which enables prediction and matching against date ranges, budgets, amounts, and frequency
What is the difference between a Proforma Plan and a Blanket Purchase Order (BPO)?
A BPO can be used to handle recurring invoices within a limited budget too, but has two limitations: The BPO matching requires the invoice to have an order reference, or a user to make the association manually. As some recurring invoices, such as utilities and phone bills, rarely contain an order reference, processing of such cannot be completely automated using a blanket purchase order.
The BPO does not contain any schedules or maximum invoice amount, but only a lump sum budget per line. This makes it difficult to control individual invoices over a longer period. For transactions and scenarios where the above limitations are not important, a BPO would still be a good solution to handle such recurring invoices.
What are Proforma qualifiers?
A qualifier is the only mandatory parameter while creating a Proforma Plan and each plan should have a unique qualifier associated with it. These qualifiers can either be based on a header level field or on a line level field on the invoice. For example, it could be a contract number in an invoice. If it is set as a recurring invoice based on this contract number and an invoice comes in with this value then it will be automatically mapped to that particular proforma plan. If the qualifier is based on a header level field, then all lines in that particular invoice would be matched to the applicable Proforma Plans line.
How to create a Proforma Plan
To create a new Proforma plan, open an active Purchase Order, and select the line on which the plan needs to be created. Click on Add Proforma Plan. You will then be taken to the Proforma plan app where additional details can be added.
Each Proforma plan can have multiple schedules associated with it. The schedule defines the date range for which the Proforma plan is applicable. A Proforma Plans schedule can contain other details like: applicable date range, Budget, and Maximum document amount.
Unplanned costs exceptions can be configured to be generated if the mapped lines to a Proforma plan do not fall under any of the defined schedules.
Each Proforma Plan can have a budget associated to it. This is an optional parameter. Budget exceptions can be configured to be generated if the associated invoice lines for a particular schedule exceed the scheduled budget amount.
Maximum Document Amount
Each individual invoice within the Proforma Plans can have a maximum amount associated with it. So, if a particular Proforma Plan has a header level identifier and the corresponding invoice has multiple lines, then the total invoice amount (excluding taxes, charges and discounts) would be compared. A price exception is raised in case the document amount received exceeds the maximum document amount set up in the Proforma Plan.
The creation of Proforma plans is currently controlled via a new user role. For those users that are allowed to create proforma plans, the user role Proforma Plan Creator needs to be added to via the Users app.
How to activate a Proforma plan
Once you have added all the relevant information to your Proforma plan, click on “Publish Plan” to activate the plan.
Where can I see my Proforma Plans?
Proforma Plans are stored in the Automation Dashboard app. Here you can see the list of all Proforma Plans you've created and their current statuses. You can also figure out against which order a Proforma Plan has been created by clicking on it and seeing the details that were added to the plan.
Important info: You can update a draft Proforma Pan before it's active as many times as you want. But once it's active, you cannot change it. If you have made a mistake or something has changed that needs update, you will need to close the Proforma plan and set it up again.
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