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Evaluated Receipt Settlement

Do you know , Evaluated Receipt Settlement (ERS) is a procedure for the automatic settlement of goods receipts. It was pioneered by General Motors (GM) to save the company time and money . Major benefits of ERS include invoice variance prevention , the elimination of non-value-added work (like tasks associated with reconciliation), and opportunity cost of capital savings.

What is it?

ERS is a business process between trading partners that conduct commerce without invoices. In an ERS transaction, the supplier ships goods based upon an Advance Shipping Notice (ASN), and the purchaser, upon receipt, confirms the existence of a corresponding purchase order or contract, verifies the identity and quantity of the goods, and then pays the supplier.

In A typical Real Life senaraios with client using ERP prefreably Oracle EBS Suite.

Evaluated Receipt Settlement (ERS), also known as "Invoice on Receipt" or "Pay on Receipt", is a process whereby company creates a system invoice on behalf of the supplier for receipts booked against PO's or BPA releases. The processes from invoicing to payment are thereby automated, reducing the level of human error and improving payments to suppliers.

Benefits of ERS

If your customer have ERS Suppliers that uses BPA for direct material supplies where goods can be accurately received , you can explore this options.

A note with Oracle EBS Functionality

This feature is alternately known in Oracle User Guides as:Evaluated Receipt Settlement (ERS) or Payment on Receipt (POR) or Self-Billing Invoices (SBI)

The Oracle Process


How does it work in Oracle ?

Receipt transactions trigger invoice creation

  • Receipt
  • Delivery
  • Advance Shipment Notice
  • Advance Shipment and Billing Notice

Therefore , Depending on your business needs, you can use Pay on Receipt to automatically create invoices for:

  • All your vendors; or
  • Select vendors; or
  • Select Purchase Orders

Invoices are generated by running the Pay on Receipt AutoInvoice and Payables Open Interface Import processes.

Invoices move normally through Approval and Payment processes.

Process Returns with automatic Debit Memos that are matched to the original Purchase Order.

In such cases, Invoices are consolidated at one of the following levels:

  • Packing Slip โ€“ Triggers one invoice per packing slip
  • Receipt โ€“ Triggers one invoice per receipt
  • Supplier Pay Site โ€“ Triggers one invoice per supplier pay site

    Hope this helps. let me know , if you have any question. next Will discuss more on tax part of ERS.