OILSINV - Oils Style Invoicing (J07)
What is OILSINV
This process handles both Sales and Purchase Invoicing for Oils based Goods. There are several different styles:-
The application is principally available for a company who’s nominated Quality Style (ctrl30_fullquality) is Oils (O). Exceptions can be applied to individual Commodities if the company is not nominated as Oils style by setting the Quality Type of the commodity to Oils (O). The Quality Types available to a specific company are maintained in Quality List (ctrl30_qualitylist).
Provisional and Final invoicing are essentially standard processes; the main differences from other invoicing programs is the application of weight and quality information. The usage of such information is dictated by the settings on the contract (TRADE/Invoice Markings) which can be defaulted on creation (see PHYSCODES/Invoice Settlement Defaults). There are various rules specific to this application that will affect the invoice value and these are driven by values held against the contract. These include:
To raise Circle, String, Washout and Docs Bypass invoices the contract needs to be nominated as such through Invoice Type (TRADE/Miscellaneous). Other conditions must be met depending on the type of invoice and these are specified below but in all cases a settlement price must be entered (TRADE/Invoice Markings).
Invoice Styles
Provisional/Only Invoice
Available for both Purchases and Sales, either for Provisional Invoices (where contract marked as Final Required) or once only Invoicing (no Final Required).
Finals
Available for both Purchases and Sales where Provisional Invoice has already been raised. Can be used to settle weight and quality differences.
Circle
This Invoice style is required when one of the parties in the chain meets itself. A circle is a once only invoice where the contract counterparty is invoiced at the difference between the contract and settlement prices using the contract weight. It can be activated from either a or a Purchase depending on the position in the chain. Must be allocated with both sides marked as Circle, same settlement price and same contract currency. The principle contract must be uninvoiced.
String
This Invoice style is required when there is a chain but, unlike the Circle, none if the parties meet. A string is treated as a provisional and a Final can be raised to settle weight and quality differences. The contract counterparty is invoiced at the difference between the contract and settlement prices. It can be activated from either a or a Purchase depending on the position in the chain. Must be allocated with both sides marked as String, same settlement price and same contract currency. The principle contract must be uninvoiced. If a Final is raised then previous invoice amount will be shown as a split between theoretical (as if invoiced at full contract price) and actual amounts; the balance calculation will apply the theoretical value.
Washout
This Invoice style is required when the Purchase and Sales in the allocation are to the same counterparty, with matching commodity, contract terms and shipping period. A washout is a once only invoice where the contract counterparty is invoiced at the difference between the contract and settlement prices using the contract weight. It can only be activated from the Sales side as both sides are handled simultaneously. Must be allocated with both sides marked as Washout, same settlement price and same contract currency. Both sides must be uninvoiced.
Docs Bypass
This Invoice style is required when the Trader has agreed to bypass passing documents/title of the goods down the chain and will settle their commitment with an accounting entry. The documents are passed directly between the seller at the beginning of the chain and the receiver at the end. The settlement price is generally the sales price to the receiver of the documents (goods). The principle difference between this style and a string is that the provisional sales invoice is split to 2 parties; the contract counterparty for the difference between the contract and settlement prices, and the Docs Bypass counterparty (nominated at the time of invoicing) at the settlement price. Normal provisional rules apply and a Final can be raised to settle weight and quality differences. It can be activated from either a or a Purchase depending on the position in the chain. Must be allocated if activated from a but not necessarily from a Purchase. The principle contract must be uninvoiced.
Note: It may be useful to build some memorandum as to which parties are involved in the chain; Traffic memo is a suitable place for this.
Reversals
Any, and only, invoices raised within OILSINV can be reversed within this application. Standard rules apply.
Invoice Markings Settings
Provisional Percentage
This is the percentage to be applied when producing Provisional Invoices. It will only be applied if the contract is marked as requiring a Final. This value can be shown in a template using the [prov_clause] rule.
Quality Adjustments
Quality results are handled differently depending upon the Chemistry Type assigned within PHYSCODES/Analysis Codes. Essentially any result with type of Moisture will be treated differently to those that are not. The main difference is the basis used in the calculation; Moisture calculations will use the net weight invoice value including any excess/loss adjustments and Late Shipment penalties where applicable, whereas any other quality result will use the net balance inclusive of any Moisture adjustments. Weight Excess/Loss @ Contract Price
Percentage of excess weight to be invoiced at contract price. Excess/loss calculated as difference between Contract and Discharged weights. The template rules have been designed to split the calculation up into two parts:
· Weight/value @ contract price
· Excess/Shortage @ contract/market price (depending upon excess @ setting) Price to Apply for Further Excess/Loss
Holds setting for how weight adjustments beyond the above will be handled. By default it is assumed that the contract price will be applied to any further excess/loss, however this can be overridden by a daily market price which can be entered at the point of invoicing. This price can be shown in the template using [mktprice] rule with an optional date also entered when raising the invoice [mkt_date].
Oils Franchise
Percentage of excess weight (in the case of a shortage) that will always be for the Buyer’s account. Excess calculated as the difference between Loaded (Shipped) and Discharged weights, where:
· if no difference in weight, no Franchise is applied
· if there is a difference in weight then apply difference at contract price, to a maximum of LW * franchise %
If a franchise value is applied then this will only affect the net invoice value and has no influence on Late Shipment/Quality adjustments.
Late Shipment
Can be applied using a contract cost estimate setup and nominated as ‘Late Shipment’ within PHYSCODES/Cost Types. It is always applied as a percentage against the net weight invoice value and can be shown in a template using the [ls_basis] and [ls_amount] rules.
Company Settings for Accounting
There are three company settings that will affect the accounting principles of this application:
· ctrl30_invoicestyle; either SVG (will control accrual accounting practices, posting to P&L) or non-SVG (no costs to be accrued, posting to WIP) – if SVG style then following settings will have an impact
· ctrl30_autofx; if ticked/flagged all non-home currency (ctrl02_homeccy) accounting transactions to P&L type accounts will be translated immediately through FX P&L (ctrl02_fxsusp)
· ctrl30_postpl; can be set to either use the contract/WIP commodity code to derive P&L account, or to indicate to use WIP liquidation account or explicit ctrl30_pl and ctrl30_costofsales