Processing invoices based on a contract using templates

Processing invoices based on a contract using templates

To work optimally with the Spend Cloud, you can link an invoice to a contract. If the invoice falls within the contract's tolerance, the invoice will be automatically approved. The reviewer will then not need to approve the invoice. In addition to skipping the approval step, it is also useful to quickly and uniformly automate the coding of invoices based on the contract. You can achieve this by making good agreements with the creditor and requesting an XML invoice, but you can also achieve this by setting up a template. In this article, we explain our best practice for processing invoices belonging to a contract as efficiently as possible in combination with templates.

The Setup in Three Steps

Are you already familiar with the process but want a quick refresh? Read the steps below.
  1. Create the Contract: Ensure that the purchasing contract (rent, license, real estate, lease, etc.) is first registered in the Spend Cloud.
  2. Create the Template: Create a new template for the relevant creditor.
    1. Add Invoice Lines: Use the 'Add Invoice Line' option for each cost item (rent, service costs, license, support).
    2. Link the Contract: In the detailed view of each invoice line, link the relevant contract.
    3. If applicable, select the template as the 'standard template' in the relation settings.
  3. Processing Invoices: When an incoming invoice (e.g., the monthly rent invoice) is processed based on this template, the software will automatically include the contract link at the line level. Apply the template to the invoice during coding. With a standard template, it is applied automatically if the relation on the invoice is recognized.

How Do You Set This Up?

Contract

The foundation of this optimization starts with an active contract. The contract must also meet the right conditions to automatically approve invoices that are linked to it. You do this with the setting: 'Automatically approve invoices', the potential deviation margins, and the invoice frequency. If you want to know more about how to set this up, read the following article: Automatically approving an invoice based on a contract.

Template

Next, you create a template. You do this via the section Application Management / Invoice Processing / Templates. In the following article, we explain in general how to add and manage templates: Adding Templates. There are a number of situations where using a template is most profitable. We will explain these situations below.

Idea
When you create a template, you can select the relation, meaning the template can only be used for that specific relation. If this relation only has one template, apply the template as the 'standard template' in the relation settings.

Example Situations for Template Setup

The situations below are the most common where you can use a template in combination with a contract. Based on our best practices, we would like to show you how to best configure this combination.

Example Situation 1 - Contract with fixed invoice frequency and the same recurring costs for one location and/or one cost item
These are, for example, telecom, lease, or rental contracts.
  1. For these types of invoices, it is important that the period is filled in correctly. If the invoice frequency and the period are set up correctly in the contract, the Spend Cloud checks per period whether the consumption still falls within the relevant term.
  2. The period is filled in based on the invoice date or the relation setting for a deviating period. Do you receive one invoice per month for one period? Then assign one period in the template. Does the invoice cover multiple periods? Then add multiple periods to the template.
  3. Do you receive one invoice per period with a fixed amount? Then choose a fixed amount when adding the template.
  4. Do you receive multiple invoices with different amounts in the same period? Then choose variable amounts with a percentage of 100% in the line.

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Is it possible that there are extra (incidental) costs on the invoice? Decide in advance whether you want to include this in the template. With a fixed frequency, we recommend including it in the template; if it only occurs occasionally, it may be easier to book these separately in the invoice after applying the template.

Example Situation 2 - Contract with fixed invoice frequency and the same recurring costs, for multiple locations and/or multiple cost items
These are, for example, utility or maintenance contracts.
  1. For these types of invoices, it is important that the period is filled in correctly. If the period and invoice frequency are set up correctly in the contract, the Spend Cloud checks per period whether the consumption still falls within the relevant term.
  2. The period is filled in based on the invoice date or the relation setting for a deviating period. Do you receive one invoice per month for one period? Then assign one period in the template. Does the invoice cover multiple periods? Then add multiple periods to the template.
  3. Add invoice lines for each cost item and/or location, linking the contract number in each line.
  4. Is there a fixed amount? Then choose fixed amount when adding the template and distribute the amounts across the invoice lines. Is there a variable amount? Then choose variable (percentages) and enter the percentage in each invoice line based on the allocation key.

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Idea Is there no fixed allocation key? Then do not use a template but ask the supplier for an XML invoice.

Example Situation 3 - On-demand orders
You can use this for various situations where the costs and invoice frequency are variable. Think of the incidental ordering of small goods or services for a technical department. No purchase order is created, but small goods or services are requested directly from the supplier, possibly via a service like Topdesk. You create a contract for partial invoicing, calculate the amount based on history, and enter this as the contract value. Then, you create a template to easily process these invoices. You link the budget holder as the contract concerned to the contract and have them receive periodic e-mail notifications to stay informed of the consumption.

Other Tips

  1. If the template is set as the standard for the relation, it is automatically applied when the relation is recognized on the invoice. We only advise against this if you also receive invoices from this creditor that fall outside the contract.
  2. Make maximum use of the standard description in the relation settings. This way, you do not have to fill this in for the template and you maintain uniformity in the descriptions.
  3. There is no automatic link between a template and a contract. This means that if changes are made to the contract, you must manually update the template. Tip: Implement a mechanism or process where, upon contract mutations, such as an extension, the relevant templates are also checked.
  4. Create a free field to indicate whether a template has been or needs to be set up for this contract. This way, you can create an overview for yourself of contracts that have a template, even though there is no direct link between a contract and a template.

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