In the ever-evolving business operations landscape, efficiency and automation are the linchpins of success, allowing users to streamline their core business processes and improve productivity across their entire workforce landscape.
Enter SAP ERS, or Evaluated Receipt Settlement, a game-changing approach to procurement and accounts payable, transforming how organizations create invoices, conduct invoice verification, handle payments, and manage vendor master data.
The ERS solution streamlines and simplifies a manual, error-prone invoicing process by automating the reconciliation of purchase orders, service entries, goods receipts, and supplier invoices.
This article discusses the key components and capabilities of ERS in SAP, how it paves the way for a more efficient and productive financial ecosystem, and where our SAP consultants can come in to help.
What Does ERS Mean?
Evaluated Receipt Settlement (ERS) is the process of settling goods receipts automatically, allowing companies to post a vendor invoice document based on information from purchase orders and goods receipts without actually receiving any documentation from the vendor.
Before implementing the Evaluated Receipt Settlement functionality, companies must agree with the vendor about the ERS process and any applicable conditions.
Once the ERS process is initiated, settlement documents will be sent automatically to vendors in the required format, including email, print, or fax.
The ERS process in SAP provides the following advantages for business users:
- Avoid communication errors and accelerate time-to-value
- Reduce price and quantity variances across the invoice verification process
- Improve the speed of purchase order closing processes
- Eliminate the need to receive an actual invoice document from each vendor
Understanding the Concept of ERS in SAP MM
ERS is a procurement and accounts payable process in SAP Material Management (MM) that simplifies and automates the way organizations handle invoices and payments for materials and services.
ERS is often used in scenarios where a company has a close relationship with its suppliers and wants to streamline the invoice and payment process and improve the efficiency of material and planned delivery cost settlement across their organization.
In ERS, an agreement is made between the customer and vendor that no invoice is created for a delivery, but rather, the system posts the invoice document automatically based on the purchase order, goods receipt, returns, and return deliveries. This way, goods movements can be settled without receiving an invoice or credit memo.
Here’s a closer look at the prerequisites for implementing ERS in SAP:
- Indicators for evaluated receipt settlement must be activated in vendor master data
- Company code and tax code must be maintained in the purchase order
- Purchase order must have an associated confirmation
- GR-IR and ERS indicators must be activated in the purchase order
Key Features of Evaluated Receipt Settlement in SAP
In the ERS system, users select specific goods movements that can be settled and leverage the same reference document to settle each separate goods movement.
Here are a few goods movements that can be settled through Evaluated Receipt Settlement:
Returns
The ERS system creates a credit memo when goods receipts are posted for return items. The vendor then receives a debit for the amount returned as empties to balance the purchasing transactions and returns.
Return deliveries
When an invoice has already been posted for a goods receipt and a return delivery occurs in the meantime, a credit memo is created in the ERS system and a debit memo for the returned quantity is sent to the vendor.
Goods receipts
Once the system determines the amount to be invoiced for the purchasing activity from the purchasing prices, tax information, delivery quantity, and payment conditions entered in the goods receipt, credit memos are sent to the vendor.
Goods receipt reversals
If the goods receipt has already been settled, credit memos are sent to the appropriate vendors when the reversal is initiated.
If the goods receipt has not already been settled, the reversal quantity is cumulated with the existing goods receipt quantity.
In cases where the resulting quantity is settled at zero, no invoice is created or sent to the vendor.
Seamless Integration with ERS in SAP
The ERS process plays a critical role in connecting processes and facilitating communication between customers and vendors.
Once the ERS process has been initiated by the customer, the settlement document is sent to the vendor, including critical amounts based on the agreed purchasing conditions and created quantities within each specific goods movement.
How Can We Help?
Whether you need help outlining the most critical process steps for material settlement across your organization, additional support managing the data in the purchase order and goods receipts, or just an extra hand getting started on your SAP journey, Surety Systems is here to help.
Our senior-level, US-based SAP consultant team has the knowledge, skills, and proven track record of success to handle all your most critical SAP project needs and help you maximize your investment.
Getting Started with Us
Interested in learning how the Evaluated Receipt Settlement process in SAP can improve invoice verification and streamline material settlement processes across your organization? Ready to get started on a project with our team of expert SAP consultants?
Contact us today!
