In the automotive industry, suppliers often do not send invoices to their customers. Instead, the customer remits a self-bill. This document details shipments received and the amount due to the supplier for these shipments. The amount also reflects any deductions for defective or damaged parts, and any other pertinent credits due. This document is called a self-bill because the customer decides the payable amount instead of relying on an invoice from the supplier.

The slide shows the traditional self-billing workflow.

The self-bill is remitted to the supplier, who then processes it and compares it with open invoices. When the self-bill information is entered into the system, it is matched to invoices for that customer.

If the supplier notes any discrepancy between the self-bill and their records, the customer must be notified within a predefined period for corrections to be made. In some situations, a self-bill is remitted and only later is the payment made. In other situations, payment can accompany the self-bill.

The payment remitted reflects the self-bill and any agreed-upon corrections from previous self-bills. Each supplier-customer relationship usually sets up specific rules for reconciling discrepancies. Sometimes these must be written off as losses by either the supplier or the customer.

Many industries do not use the traditional self-billing methodology. In some situations, suppliers do send invoices to their customers. However, customers disregard these and, as in the traditional self-billing environment, send their own type of remittance advice document to their supplier. This customer remittance document contains different details, based on the specific industry. These details can include customer bill-to, PO numbers, kanban numbers, RANs, shipper numbers, invoice line-item numbers, sales order (SO) numbers, and others.

The customer remittance document must always include an amount payable to the supplier. This can also be in the form of an ERS payment. The amount can reflect any adjustments for defective or damaged parts and any other pertinent credits due.

Unlike the traditional self-bill process, other industries do not necessarily rely on the customer-remitted document number as reference to the original supplier invoice. Instead, the supplied information must be used to reconcile the customer’s remittance document to the supplier’s invoice records.

The slide shows the Self-Billing process map, which in part of the Accounts Receivable set of process maps.

The process map shows the steps required to set up self-billing and to process customer remittance information to create self-bills. The map also shows the self-billing reports you can run.

When using the Self-Billing process map in the system, you can click the nodes to access the screens that let you perform self-billing activities.