Vendor Approval Processing Version

Contents

Overview

This topic outlines how to set up and use the vendor approval process and how to monitor vendor approvals in progress. Financial staff and anyone who creates or approves new vendors should find parts of the discussion useful. The information also will be of interest to system administrators.

The vendor approvals process enables designated approvers to review and approve -- or reject -- new vendors created in Accounts Payable or Materials Management before they can be used in the application. The approval process also applies to changes in the AP location Check Name field values for an existing AP vendor.

A new vendor or a changed Check Name can be reviewed by a single “direct” approver or routed to an approver group.

Vendors subject to the approval process are suspended until approved, and cannot be used anywhere in the system where suspended vendors are invalid. Once approved, the vendor and its AP locations are automatically unsuspended.

Settings on the User Profile determine whether new vendors created by the user must go through the approvals process. Users who have either a Vendor Direct Approver or an Vendor Approver Group assigned have their newly created vendors enter the approval process before the vendors can be used in the application.

Security

Role objects control access to vendor approver groups and vendor approval queues. You may need to change the settings of role objects for users who work with and administer vendor approvals.

• The role object VendorApproval controls maintenance of approver groups and access to their respective approval queue lists and approval features.
• For users who are approvers, to access My Vendor Approver Queue, VendorApproval must be set minimally to Modify or higher in the users' roles.
• For users who create and edit approver groups, VendorApproval must be set minimally to Create. This setting activates the New button on the Vendor Approver Groups Edit page.
• For users who create and maintain approver groups, the Vendor Approval role object setting All activates the approver groups Menu.
  - For users with access to the ...All queue, the VendorApproval role object control the menu features.

The default setting for role objects is None.

The documentation topic Set Up and Maintain Users, Administration, and Security explains role objects and user security in detail.

Approval Process

Approval requirements are set up as follows:

• The approval requirement for new vendors is specified in a User Profile.
  If a user requires approval when creating a new vendor, that person also requires approval for changes in an existing AP vendor's Check Name.

How the System Determines Whether a Vendor or Updated Check Name Needs Approval

The system determines whether a vendor needs approval by the settings on the User Profile of the person creating the vendor. If the user is flagged as needing approval, the system routes the vendor to the approver group or direct approver assigned on the person's User Profile.

Approver Queues

Each approver has an approval queue that contains new vendors or changed Check Names awaiting approval. An approver can select an unapproved vendor from the queue and approve or reject it.

If specified on an approver's User Profile, the system can send a notification to an approver when a new vendor (or vendor with an updated Check Name) is placed on the person's queue. Notifications can also be sent to the person who created the vendor or updated the Check Name upon approval or rejection.

An all-approver queue of vendors awaiting approval is also available. This queue is useful for managers or others who have higher-level authority for all  ERP application functions. (See Security for the role object setting.)

Set Up Vendor Approvals - General Steps

Setup for vendor approvals processing has these steps:

Identify Approvers

• From Work in Administration on the main Contents, select Administration > Users.
  The list of users appears.
• Locate the approver on the list.
• Click the edit icon or Menu > Edit.
  The Users panel appears, open to the General tab.

Identify Users Who Are Vendor Approvers

1. Click the User Roles tab.
   The User Roles panel appears (Figure 1).
   If you are setting up a new user, select a user Role, a Data Profile, and a Report Profile. You can also edit these fields if needed. (You can ignore the Security Level field. This field is for Sourcing and Contract Management users who handle services contracts.)
   The topic "Set Up and Maintain Users, Administration, and Security" explains how to set up a user.
   

Figure 1 - User Roles Panel

2. Select the field: User is Vendor Approver.
   Keep the Users panel open. (You are going to access other tabs.)

Select an Approver Buddy and Set Notification Options for an Approver

3. On the Users panel, click the Approver Limits tab.
   The Approver Limits panel appears (Figure 2).

Figure 2 - Approver Limits Panel: Requisitions, Check Requests, and Invoices

4. Click the prompt next to the Vendor Approver Buddy field to designate an approver buddy for the user.
   When the approver goes out of the office (the Out of Office field is selected), the approver buddy is sent the person's pending vendor or Check Name approvals. (The vendors needing approval go to the approver buddy's queue.)
   Note: Approvers can change their own out-of-office settings from the Misc Functions menu in the main Contents. Select Misc Functions > Change My Out-of-Office Status.
5. If the approver wants to be notified when a vendor/Check Name change has been submitted for approval, select Email on Submission in the Vendor Submit Notify Type field.
6. Click Save.

Configure Vendor Approver Groups

Vendor approver groups allow vendors and updated Check Names to be routed to multiple approvers.

To create a vendor approver group

1. From the Accounts Payable main Contents, select Vendors > Vendor Approval Groups.
   The Vendor Approver Groups list appears.
2. Click New to create a new vendor approver group.
   The Edit panel appears (Figure 3).
3. Enter a name in Approver Group field and a description of the approver group in the Description field.
4. Click Save and Submit.
   

Figure 3 - Entering Descriptive Information for a New Approver Group

The Vendor Approver Group Edit panel appears (Figure 4). When you add users to the group, they are listed on the lower part of the panel.

Figure 4 - Approver Group Users Panel: A New Group is Being Created

5. Click New. A panel appears for entering a User ID. (Figure 5)

Figure 5 - Adding a User to an Approver Group

6. Enter information for the approver in the fields on the panel.
7. Enter an integer in the Sequence field for each member. The Sequence is the approver's order in the approver group. Vendors are routed to approver group members in sequence.
   Click Help for more information about fields.
   
8. Click Save and Submit.
   The system returns to the Approver Group Users list.
   Click Refresh to view the user that you just entered (Figure 6).

Figure 6 - Approver Group with Three Members

To enter more users, go back to Step 5 and follow the steps until the approver group is complete.

9. Click Save and Submit on the Vendor Approver Group Edit panel.
   You can now assign the approver group to users who create vendors.

Set Up Users Who Create Vendors

For users who create new vendors, each user profile lets you specify whether vendor approval is required, and notifications (if any). Several fields on the AP Limits (Figure 7) panel are available for this purpose.

1. On the Users panel, click the AP Limits tab.
   The AP Limits panel appears (Figure 7).

Figure 7 - AP Limits Panel - Sets Vendor Approvals Required

2. Select a Vendor Approval Group or a single Vendor Direct Approver (but not both).
   See the discussion about how to create a vendor approver group.
3. Use the Vendor Approval Notify Action field to specify if the user should receive a message when one of the user's vendors is approved or rejected.
   No notification is the default.
4. Click Save.
5. Click Submit when you are finished editing the Users Profile.

Define Reason Codes

Reason Codes provide a shorthand method for communicating the reason for rejection (or approval). When a vendor approver approves or rejects a new vendor or a changed Check Name, the approver selects a Reason Code from a list that you or your system administrator creates.

To create Reason Codes

1. From the Accounts Payable Contents, select Tables > Reason for Approval Rejection.
   A list of reason codes appears, or No Data if none have been created.
2. To create a new Reason Code, click New.
   The Reason for Approval Rejection panel appears.
3. Enter the new Reason Code and its Description in the appropriate fields.
4. Click Save and Submit.
5. Refresh the Reason Codes list. The new code appears.

Specifying Approvers on a New Vendor Record

When you create a new vendor, the Approval tab contains fields that default to approvers or approver groups assigned on your User Profile.

To identify the approver group or direct approver on a vendor record:

1. On the Vendor Edit panel, click the Approval tab (Figure 8).
   If a direct approver or approver group has already been assigned on your User Profile, the name will appear in the appropriate field.

Figure 8 - The Vendor Edit Panel Approval Tab

2. On the Approvals panel (Figure 8), click the ellipsis (...) to select either the Approver Group or the Direct Approver.
   Note: If already assigned, the direct approver or approver group cannot be changed.
3. Complete other fields on the Approval tab as needed.
4. When you are ready to submit the vendor for approval, click Submit.

• You can change the values you enter on the Approval panel before you click Submit to submit the vendor for approval. After a vendor has been submitted, the approval fields cannot be changed.

Monitor the Progress of a Vendor Through Approvals

When you create a new vendor that needs approval, the Vendor Status is set to Pending Approval and the vendor is suspended. When the vendor is approved, the Vendor Status is Approved and the Suspended flag is removed. After routing through the approvals process, if the new vendor is rejected, the Vendor Status is Rejected, and the vendor remains suspended. You may also see the Vendor Status Rejected, Updating Vendor. This value appears when the vendor has been rejected, and the user is updating the vendor information before resubmitting the vendor for approval; the vendor is still suspended.

With updated Check Names, if a vendor requires approval, the system reminds you that changing the Check Name will trigger the approval process.
You can accept (click OK) or cancel (click Cancel). Clicking OK routes the changed Check Name through approvals. The AP location is suspended until approval is granted. The Vendor Status is set to Pending Approval. After routing through the approvals process, if the Check Name change is rejected, the Vendor Status is Rejected and the AP location with the Check Name change remains suspended.

The Vendors list lets you monitor the progress of a newly created vendor or an updated Check Name through approvals.

Vendors List Panel Columns

• To display the Vendors List panel, from the Accounts Payable main Contents, select Vendors > Vendors.

For vendors that must be approved, or for updated vendor Check Names that must be approved, the Vendor Status column indicates the approval status. Values are:

Approved - The vendor or the updated Check Name for an existing vendor has been approved, and is available for use in POs.
Rejected - The vendor/Check Name update has been rejected by approvers.
Pending Approval - The vendor/Check Name update has entered the approval process.
Rejected, Updating Vendor - The user is updating information for a rejected vendor before resubmitting the vendor for approval.

Review, Approve, and/or Reject Vendors

Direct Approvers are solely responsible for the approval or rejection of a new vendor or updated Check Name for an existing vendor. When they approve a vendor, the Vendor Status is Approved.

Approver groups share responsibility for the approval or rejection of a submitted vendor/Check Name update. When a member of an approver group approves a vendor, the Vendor Status remains at Pending Approval until all eligible approvers in the group have reviewed the vendor. When the last eligible approver approves the vendor, the Vendor Status is set to Approved.

Vendors and Check Name updates are routed first to last, sequentially through an approver group, based on the sequence number associated with each group member.

When an approver user sets his/her "out of office" status, approvals for the user are routed to the user's approver buddy.

Approvers access vendors waiting for approval through approval queues.

- My Vendor Approval Queue is unique for each approver and shows vendors assigned to the approver.
If you are a vendor approver, this queue contains vendors assigned to you.

- All Vendor Approval Queues shows vendors assigned to all approvers.

Based on a vendor approver's user profile settings, the approver may be notified by an email when a new vendor is placed in his/her approval queue.

Review Vendors in Your Approval Queue

The Accounts Payable main Contents contains menu links to the approval queues.

To review vendors assigned to you:

1. From the Accounts Payable main Contents, select Vendors > My Vendor Approval Queue.
   A list of vendors ready for approval appears. (Figure 9 displays a queue.)
   The Review Status (Figure 9, green arrow) is Not Reviewed.
   
   The Review Status can have these values:

• Not Reviewed - The approver has not looked at the vendor.
• Reviewed - The approver has looked at the vendor but has not approved or rejected it.
• Rejected - The approver has rejected the vendor.
• Approved - The approver has approved the vendor.

The review reason is also supplied in the column Reason Approval Assigned. This column can have these values:

For Vendor Approval - The vendor needs approval because it is new.

For Vendor Change Approval - A change made to the vendor; i.e., an updated Check Name needs approval.

Figure 9 - A Vendor in the User's Vendor Approval Queue

2. From the Menu next to the vendor, select the appropriate action: Approve Now or Reject Now. (You can also review or create user notes.) .
   An approval or rejection confirmation panel appears.
3. Select a Reason Code.
4. Click Submit.
5. If you wish to create notes for the vendor, click Menu > Vendor User Notes.
   
   Based on the selected Approval Notify Action on the vendor, the user who created the vendor may be notified by an email when the vendor is approved.

Notes:
- When the Vendor Status is Pending Approval, the Submit button is disabled on the vendor Edit panel. A user who edits the vendor cannot click Submit to process the vendor. The vendor must first be approved.

How to Handle Suspended AP/Buy From Locations with Rejected Changes

Consider the situation where a user made a change to a vendor AP Location, submitted it for approval, and it was rejected.
The AP Location was set to suspended when it was submitted for approval and, because it was rejected, it stayed in that status.  The problem was: how to get the AP Location unsuspended. Assume that the AP Location is not new and had been used prior to the change, so it was still needed and could not remain in a suspended state. 

Normally, for a suspended AP Location, you can open the AP Locations menu and Unsuspend the AP Location. However, since this AP location had been through the approval review, the menu item for unsuspending it is grayed out (Figure 10).

Figure 10 - AP Locations List Menu

To resolve the problem, edit the AP Location record and undo the change that you made (or correct the problem that caused it to be rejected). Click Submit. The AP Location goes back into the approvals process.

Approval Routing when an Approver Buddy Belongs to an Approver Group

When an approver's Out of Office status is set, vendors for the approver go to his/her approver buddy. If an approver group is assigned to the vendor, both the original approver and the person's approver buddy can belong to the approver group.

In this situation:

• As the vendor for approval routes through the approver group, if the approver buddy is the next approver, but has already approved as a "buddy," he/she is skipped, and does not have to approve again.
• Conversely, if an approver group member approves the vendor, and then serves as the approver buddy for a subsequent "Out of Office" approver in the group, the vendor is not routed again to the approver buddy.
• The system writes a system note that indicating the duplicate routing was bypassed and the vendor automatically approved.

If you are a system administrator, or have the appropriate authorizations, you can view all vendors/updated Check Names for approval. The list is in the Vendor Approval Queue - All Approvers and Vendors (Vendors > All Vendor Approval Queue), Figure 11.

Figure 11 - All Vendors Approver Queue

Making mass changes to approver assignments

An accounts payable feature lets you create maintenance jobs for mass changes to vendor approver groups (Figure 12).

Figure 12 - Accessing Mass Approver Changes from the Vendors Menu

The mass approver change feature lets you swap multiple approvers in and out of approver groups for vendor approvals.
You can change the members of approver groups; remove approvers from groups; and add new approvers to approver groups.
The remove function also lets you remove an approver as the direct approver for other users.

Similar to other "mass change" features, you first create a "mass assignment" job, and specify the approver reassignments in the job.
When the job runs, the changes take effect.

Details on using the mass maintenance feature are in the topic "Making Mass Approver Changes."

Reports

The fields Approval Status and Approval Needed Date have been added to these report objects for vendor approvals:   

Vendor AP and BuyFrom Locations
Vendor Locations
Vendor Master
Vendor Master User Fields
Vendors Only.

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