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Invoices – Allocate Services (Part 2) –Automatic Allocation

Contents

This is the second part of a series of articles exploring the Allocate Services action found in the Invoices application. We won’t be using the action Allocate Services but there will be a Standard Service for FREIGHT with Prorate Service field set. When you approve an invoice Maximo will automatically perform the allocation, but only to material lines, and not to other services.

Automatic Allocation of Prorate Service

In this scenario we will use two of the storeroom items created in Part 1, add to the Purchase Order a Standard Service for FREIGHT with Prorate Service set, and add a fourth PO line for an INSTALL Standard Service but where the Prorate Service is not set. The automatic allocation of the FREIGHT standard service should be against the two material items, PO Lines 1 and 2, the INSTALL Standard Service should not receive any of the service allocation of the FREIGHT Standard Service.

Purchase Order

A new Purchase Order has been created with two of the material items used in Part 1 and Standard Service FREIGHT that is set to Prorate and a 4th PO line with Standard Service INSTALL which is not set to Prorate Service.
Purchase Orders – PO Lines

Maximo can automatically prorate service on invoice approval. In this illustration I want to show that this automatic allocation of services only occurs for material items and not for services which may also be on the purchase order.

I’ve created a new PO 1101 with two storeroom items previously used:

The third line is a Standard Service FREIGHT charge of $40, its Prorate Service field is set. I would expect that $20 will be split across both the first two PO lines for ITEM03 and ITEM04.

I’ve added a fourth line to the purchase order for Standard Service INSTALL, an installation charge, Quantity 1 and Line Cost $100. Its Prorate Service is not set. Automatic allocation of standard services should not prorate services to purchase order lines of type Standard Service or Service.

I’ve now approved the purchase order.

Receiving

The two material lines for our Purchase Order have been received in the Receiving application and Material Receipts tab. The table window action Select Ordered Items had been used.
Receiving – Material Receipts

I’ve received the two material lines for ITEM03 and ITEM04. Received Cost is $100.

The two Standard Service lines for our Purchase Order have been received in the Receiving application and Service Receipts tab. The table window action Select Ordered Services had been used.
Receiving – Service Receipts

I’ve decided to receive both Standard Service items for FREIGHT and INSTALL. This has added $140 and the Received Cost is now $240. The reason for receiving the prorate FREIGHT item is to illustrate that there is no allocation of services when you receive the Standard Service, it only works from the Invoices application.

The help text on the Purchase Order line for the field Prorate Service says – Specifies whether the line item is a standard service, such as freight cost or an installation fee, which has been prorated (allocated). The check box is read only. If the check box is selected, the line item is a standard service which has been prorated. If the check box is cleared (the default) the line item is not prorated. Services are prorated in Maximo’s Invoices application if your site uses Invoices to manage its invoices. If your site does not use the Invoices application, services are prorated upon PO arrival in the Purchase Orders application.

It is the phrase of this last sentence which might imply that if you do not use the Invoices application the services are prorated during PO approval or receiving. This has not occurred. An IBM Support case has been raised to check and to amend the help text if it is inaccurate. I have also raised an IBM Idea to have Allocate Services added to the Receiving application. https://ideas.ibm.com/ideas/MASM-I-1687

Invoices

In the Invoices application we created a new invoice and referenced the PO on the header. Now on the Invoice Lines tab we are using the table action Copy PO Lines and have selected all four PO Lines to copy to the invoice.
Invoices – Invoice Lines – Copy PO Lines table action

I’ve created a new invoice and referenced PO 1101 on the invoice header. In the Invoice Lines tab, I’ve used the Copy PO Lines action and will select all four items to add as invoice lines.

After copying the four PO Lines to the invoice we have now approved the invoice, we did not use the Allocate Services action.
Invoices – Invoice Lines – Approved Invoice

I’ve saved the Invoice Lines and immediately used the action Approve Invoice; the invoice is now at APPR status.

After invoice approval, invoice line 1, a material item shows the effect of the automatic prorate of the FREIGHT standard service. The freight charge of $40 has been split evenly across the two material lines, the Prorated Cost is $20 and the Loaded Cost is now $70.
Invoices – Invoice Lines – Invoice Line 1 after invoice approval

For PO 1101 and PO line 1, ITEM03, the Prorated Cost is $20, and the Loaded Cost is $70, which is the Line Cost + Prorated Cost. The FREIGHT charge was $40, and I was expecting it to be split evenly between PO Line 1 and PO Line 2 as their Line Costs were both $50.

After invoice approval, invoice line 2, a material item shows the effect of the automatic prorate of the FREIGHT standard service. The freight charge of $40 has been split evenly across the two material lines, the Prorated Cost is $20 and the Loaded Cost is now $70.
Invoices – Invoice Lines – Invoice Line 2 after invoice approval

For PO 1101 and PO line 2, ITEM04, the Prorated Cost is $20, and the Loaded Cost is $70, which is the Line Cost + Prorated Cost. We can confirm then that the FREIGHT charge of $40 was split proportionally across the two PO material lines based on their Line Cost.

After invoice approval, invoice line 3, the Standard Service FREIGHT has been prorated. Its Prorated Cost is -$40 and its Loaded Cost has been reduced to $0. The previous Loaded Cost of $40 has been allocated across the two material invoice lines 1 and 2.
Invoices – Invoice Lines – Invoice Line 3 after invoice approval

For PO 1101 and PO line 3, the Standard Service of FREIGHT had the Prorate Service field set on its PO Line and its Line Cost has been allocated across the two material PO lines. The Prorated Cost is -$40, and the Loaded Cost is reduced to $0.

Not shown, but the Prorated field is set for Invoice Line 3.

After invoice approval, invoice line 4, the standard service INSTALL but without Prorate Service set, shows there is no change, Prorated Cost is $0 and Line Cost and Loaded Cost are equal. The automatic allocation of prorated standard services only allocates cost to material lines and not service based lines.
Invoices – Invoice Lines – Invoice Line 4 after invoice approval

For completeness I am showing PO 1101 Line 4 the INSTALL Standard Service which did not have the Prorate Service field set. It did not take part in the allocation of the FREIGHT Standard Service, its Prorated Cost is still $0, and the Line Cost and Loaded Cost are therefore the same at $100.

Receiving

In the Receiving application there are two new transactions on the Material Receipts tab (MATRECTRANS) for the prorated cost against PO Lines 1 and 2. The Issue Type is INVOICE.
Receiving – Material Receipts showing prorated services

The automatic allocation of services on invoice approval has created the material receipt (MATRECTRANS) transactions with Issue Type INVOICE, one each for ITEM03 and ITEM04; this contains the proportion of prorated FREIGHT services.

If you went to the Inventory application for ITEM03 you will find its Average Cost has now increased to $33.75. A quantity of 4 of the items have been received and while the Unit Cost is $25, a total of $35 of FREIGHT charges across the two POs will have been added, $35/4 = $8.75. $25 + $8.75 = $33.75.

Similarly, for ITEM04 its Average Cost is now $65.83. A quantity of 6 have been received across the two POs and while the Unit Cost is $50, a total of $95 of FREIGHT charges will have been added, $95/6 = $15.83, hence Average Cost is now $65.83.

In the Receiving application and Service Receipts tab there are two additional SERVRECTRANS transactions. The third line with negative quantity is a reversal of the original RECEIPT transaction (first line). The second line with Issue Type INVOICE is the result of the automatic allocation of services for the FREIGHT Standard Service, it has been prorated.
Receiving – Service Receipts showing additional FREIGHT transactions

I must be honest that first reviewing the Receiving – Service Receipts tab I was surprised to see that there had been two new service receipt (SERVRECTRANS) transactions with Issue Type of INVOICE. The third line shown with the Quantity of -1 is a reversal of the previous service receipt for the FREIGHT item, which is the first line shown.

The second line shown with Quantity 1 has a Line Cost of $40 and a Loaded Cost of $0. If you navigate to the Invoice application and Invoice Line 3 these are the same amounts, its Prorated Cost is -$40 and it is marked as Prorated.

The fourth line on the invoice for the INSTALL item has not been changed by the automatic allocation of services; its Line Cost and Loaded Cost remain at $100 and Prorated Cost is $0.

Incidentally, while we saw that the Prorate Service (PRORATESERVICE) field existed on the POLINE object, it also exists on the PRLINE and RFQLINE objects but is hidden in their applications. On the Purchase Order it acts as the default for the Invoice Line, thereby enabling the automatic allocation feature to work, it can be changed on the invoice line, if you had forgotten to set it on the PO Line.

It is also worth noting that if the PO Line Type is Service, then the Prorate Service field is blank and read-only. It can only be set when the PO Line Type is Standard Service. This is also true on the Invoices application the Prorate Service field can only be set if the invoice line has a line type of Standard Service.

The PRORATED attribute appears on MATRECTRANS, SERVRECTRANS and INVOICELINE objects.

This wraps up the second part of this article. We’ve seen that there is an automatic allocation of standard services at invoice approval. The standard service must have its Prorate Service field set and its cost is only allocated across material line items on the same invoice, other services on the invoice are not considered during this automatic allocation of services. Maximo creates the same MATRECTRANS and SERVRECTRANS transactions of Issue Type INVOICE as we saw when the Allocate Service action and dialog were used in the Part 1 article.

In Part 3 and Part 4 we will explore the Allocate Service dialog in more detail, and we will see that if you want to prorate a standard service against services then this is achievable when the dialog is used.