Understanding Invoicing at TOT

This topic outlines the principles, concepts and methods that form the approach taken to Invoicing within TOT Shirts Limited.

The layouts, work-flows and functionalities contained within the Invoice Module in strokeone have been designed and developed to encompass this.

The purpose of this topic is to provide readers with a solid grounding of the scope of, and approach taken to, invoicing by TOT Shirts Limited so that when topics that pertain to the more system based tasks for processing invoices are read, they are done so and understood within that wider conceptual context.

Invoice Components

Invoicing at TOT is generally (see note 1) made up of all or some of the following components:-

How the costs should be captured for each of these in addressed in the subsequent sections, but it is important to understand from the outset the rationale/ importance of capturing these elements on the job order/ applicable record within strokeone.

Such is the importance of accurately capturing costs within the processing cycles of our work, that for two of the above cost categories - Art Work Origination and Fulfilment, system traffic light functionality will be added. The traffic lights will be cost specific in that they will need to be set to denote that the applicable costs have been captured / dealt with for the specific record. The Invoicing process will look to the aggregate status of these lights to determine whether an invoice can be raised or not, so it is essential that the setting of these status lights is incorporated into the standard work-flow.

Origination Charges

Artwork origination charges are typically incurred on the creation of a new artwork design. - that is, the first time a stroke one "/1" job which requires artwork is undertaken.

When the job is repeated:-

The artwork might be unchanged, in which case there should be no artwork charges.
Or there may be some artwork changes (e.g. a slight amendment or ink changes) which will mean there are artwork charges.

Traffic light approach
To facilitate a robust mechanism to capture Artwork charges, a new status icon "Art Charges Complete" has been added to the Artwork record on the Tech spec tab, and appears against each job order number that the Artwork is associated to:-

The icon defaults initially to red- which denotes that the Artwork record has not been assessed nor any charges dealt with.

It is the Art Room's responsibility to:-

Assess every artwork required record (both ones which require new visuals and those only requiring Checkovers) to see if it is eligible for charging to the client.
- If there are eligible charges:-
- - Capture them on the artwork record,
  - Include these on the colour visual that is sent to the client
  - Upon client approval set the Art Charges Complete status light to Green (completed).
- If there are no eligible charges:-
- - Set the Art Charges Complete status light to Green (completed)
- If during a Checkover, the assessment identifies that although there are no actual Artwork design changes, but there are art related charges eligible (for example, the ink type to be used will change) then the charges need to be:-
- - Recorded against the artwork record
  - Communicated to and agreed with the client
  - And the client approval recorded
  - Only then, set the Art Charges Complete status light to Green (completed).
In short, you are responsible for setting the Art Charges Complete status each time (whether on a new design or a Checkover) and in doing so, you are taking responsibility that ArtWork charges:-
- Have been recorded.
- Have been communicated to the client.
- Have been approved by the client
- Can therefore be invoiced by the Accounts department.
  
  or
- There are no eligible artwork charges for the job.

Recording Art Room Charges
Art Room charges are recorded on the ArtWork Charges tab

They should be always be populated in a consistent manner to ensure that the Accounts department can easily and predictably locate and include them on client invoices.

Charges should always be recorded against the Artwork record which instructs the actual artwork to be done. This is particularly important when there is the multiple usage of the same Artwork Record.

For example, consider a simple new job for a front print with a single artwork design, but requiring two colour ways as for 1/2 the job the image will be printed in red ink and 1/2 in black ink. There is only a single origination cost for art work as only one image is required.

The artwork origination charges should be recorded against the record for ColourWay A as this is the record that has the instruction requesting a chargeable action -"Separate to Suit"

There are no charges for the record for ColourWay B as this re-uses the same Artwork record.

The correct way to record charges in this scenario:-

The incorrect way to record charges in this scenario:-

Recording costs against the wrong record is further compounded should the same artwork record be re-used across multiple jobs

In this scenario, the Accounts department will be unable to invoice Artwork costs on job 100/1 as the artwork costs have been incorrectly recorded on job 100/2.

Other Art Room related Costs

There are sometimes additional art room costs / once off costs associated with a job order that need to be recorded. The following are a couple of common examples:-

Charges for Colour Way Changes

For example, sometimes if a print run contains 2 or more different colourways, the client is charged for the costs associated with changing the colour during the run.

The charges represent, the costs of pausing the print run, removing the screens, washing them out, and then re-inking them with the new colour.

Charges for Usage of specific inks

Some inks have surcharges, and depending on the specifics of the ink requested for use on a job, a supplementary charge - a.k.a ink surcharge - may be added, to cover the miscellaneous expenses incurred by TOT Shirts Limited for its usage.

For example, a discharge ink has a finite shelf life. Should a client request a specific ink mix that requires a reasonable quantity to be used to produce an accurate mix for usage in the job, any residual mixed ink remaining after the print run will rapidly deteriorate and have to be discarded. The costs of this wasted ink are thus passed onto the client in the form of an ink discharge fee.

These and other examples of fixed price surcharges against a single process line need to be accurately recorded against the job order so that they can be captured for invoicing onto the client.

Recording these miscellaneous costs is simply a case of adding an extra line to the Art Costs tab for appropriate associated process line so that the Accounts department will pick it up accordingly

Example:-

As with earlier art costs, the charges should be input against the first instance, that is, Colour Way A

Note: if the job were repeated without alteration the colour change charge would repeat whereas the artwork charges wouldn't

Aggregate ArtWork Costs Status Icon

An aggregate ArtWork Costs icon will be introduced at the level of the job order.

This will update to green when the ArtWork charges Complete status for all of the artwork records that is associated to the job have been set to green.

The Aggregate ArtWork Costs Status icon will be exposed in the Invoices layout, and when set as green, it denotes to the Accounting department that from an invoicing perspective, all the Artwork on the job record is ready for invoicing.

Process Charges

These charges relate to the various production processes that are applied to products as instructed by the process lines on a job order.
As such, they are recorded against the Unit Price field per process line on a job order's Processes tab.

In the near future it is anticipated that these charges will automatically populate based on process matrices that are applied to the clients, with the charge for the process being derived from the matrix according to a series of input drivers [Client, Qty To Be Given, Process] harvested from the job order.

Recording of process charges is an intrinsic part of writing up a job order at Strokeone Software Limited and is well understood, so it is not anticipated that more explanation is needed here.

Product Charges

Product charges relate to the supply (or handling in the case of contract stock) of garments on a job order, and differ depending on whether TOT Shirts or the client supplies the product.

Scenario 1: TOT Supplies the Product
For garments that TOT supplies (i.e. Blank Owner=TOT Shirts Lad.) on a job order, the chargeable cost to the client for the garment is entered in the main Garment Sheet detail layout in the bottom Job Lines section against the respective SKU in the Blank Unit Price field.

Alternatively, this same Blank Unit Price field is exposed, and can be updated via the Garment Sheet tab on the job order, by selecting the applicable Garment sheet entry on the left.

The source for the prices that are entered is taken from standard TOT pricing sheets which either the customer has seen and requested, or that has been indicatively quoted to the customer.

Note:

In the near future it is anticipated that these garment charges will automatically populate based on product matrices that are applied to the clients, with the charge for the process being derived from the matrix according to a series of input drivers [Client, Qty To Be Given, Garment type, Owner] harvested from the job order..

Blank Pricing and Availability Considerations

It is worth noting here that the pricing for TOT supplied products is based on prevailing availability.

For example, a customer may wish to place an order for 1,000 of a specific manufacturer's garment (let's assume Gildan White T-Shirts) which TOT will supply and decorate.

An indicative price of £1.20 per garment is provided to the client as that is the prevailing price for that quantity of the specific manufacturer's garment.

However, it is identified that there is insufficient stock available of that specific manufacturer's garment. Current suppliers are approached but also have insufficient current stock and cannot restock within an acceptable time frame to process the client order. Eventually a supplier is located who can supply the stock within an acceptable time period, but the price if £1.35 per garment.

Under this scenario, the indicative price of £1.20 per garment cannot be met - so the client needs to be contacted to be informed of this and provide guidance as to whether they wish to proceed at the revised garment charge, or to cancel. Should they proceed at a revised cost, this needs to be recorded against the garments, so that the invoice when generated is accurate.

Scenario 2: The Client supplies the Product (Contract Stock)

For garments that the client supplies (i.e. Blank Owner <>TOT Shirts Ltd.) on a job order, the chargeable cost to the client is not based on the supply cost of the garment. It is instead based on a handling charge per garment.

This charge is automatically captured by strokeone when garments entered on the garment sheet are from an owner other than TOT Shirts Ltd.
When this occurs a Garment Handling Charge of £0.10 is recorded against each SKU recorded on a job order's garment sheets.

*** Bug as at 7th March 2016 ***

Currently, there is a bug, where the garment handling charge is not automatically generated.
Until such time as it is fixed, staff should follow the same instructions as per the TOT supplied garments, but record the Blank Unit Garment Price as £0.10 for each SKU that the client has supplied.

*** this will require that the description for product charges is amended in the Invoice Module so that is reads - Garment Handling Costs **

Fulfilment Charges

Fulfilment charges relate to the costs incurred when organising, administering and physically despatching goods to clients. There are multiple elements that go towards making up fulfilment charges:-

The resources involved picking and organising the goods for the fulfilment
The resources involved packing/boxing up the goods for despatch.
- The resource effort increases with multiple splits.

The costs of the packing materials
The despatch costs - e.g. using a courier as the method of despatching the goods to the client's required delivery details
- This will vary according to courier used, as well as the delivery period wanted.

These charges are not always definitively knowable at the initial stages of the job order and are thus subject to change so it is essential that they are communicated to the client as soon as they are finalised and that client approval is sought so that when the invoice is raised there is not dispute.

Method of Capturing Fulfilment Charges

Fulfilment charges are captured on the fulfilment record against three fixed category fields:-

Currently, charges are manually entered into these category fields as follows:-

Field	Comments
Delivery Price	Typically this will record courier delivery costs, and is entered in the form of unit quantity of and unit price. Example of a single courier charge of GBP 45.00
Packing Time	This captures the costs of packing / organising, and is typically recorded for more complicated fulfilments. It is entered as unit quantity of and hourly price of any billable packing time costs. This is typically entered in the form of Qty Hrs and Hourly rate. Example of three billable hours @ GBP 25.00 per hour The expectation is that in the future that the hourly rate charged here will be defaulted from the fulfilment matrix applicable to the client
Packing Price	This represents the cost of packing materials, and is typically recorded as unit quantity and unit price of the billable packing costs Example of 7 boxes @ 75 pence per box
Note the highlighted field for each is automatically calculated as Unit Qty * Unit Price.

Should there be no charge for a category, then it is not populated.

By default in the back end database, the category fields are populated with zeros, and updated with any values the user enters.

Currently, each of the three fixed category fields per fulfilment associated to a job order is harvested for invoice purposes.

This is inefficient as those zero charge category fields need to be manually tagged as do not invoice during the invoice population process in order that the invoice raising status is accurate.

System Enhancement:-
A system enhancement is required to alter fulfilments so that charging elements work in a similar way to Art Charges, i.e.:-

Remove the three fixed categories
Replace with a add charge function:-
- This will inserts a chargeable line on the fulfilment record which the user populates via a selectable drop down charge type, then populates Unit Qty and Unit Price
- This allows the user to add multiple charge lines
- Invoice raising process to be amended to only harvest populated fulfilment charge lines

example mock up of fulfilment charges panel on fulfilment record.

It is expected that the above alteration will be a phase 2 enhancement.

Fulfilment Charges: Traffic light approach
To facilitate a robust mechanism to record that fulfilment charges have been definitively captured and communicated to a client, and thus the fulfilment can be invoiced, a new status light of Ready to Invoice has been added to each fulfilment record.

When a fulfilment record is created, this status is initially set as Red.
It should be set as green only when fulfilment charges:-

- Have been recorded.
- Have been communicated to the client.
- Have been approved by the client
- Can therefore be invoiced by the Accounts department.
  
  or
- There are no charges for the fulfilment.

Aggregate Fulfilment Ready to Invoice Status Icon

An aggregate Fulfilment Ready to invoice status icon exists at the level of the job order.

This will update to green when the Fulfilment Ready to Invoice status for all of the fulfilment records that associated to the job have been set to green.
This aggregate fulfilment ready to invoice icon is exposed against the job on the Jobs to be Invoiced Layout, and is one of the key drivers in knowing when an invoice for a job can be raised.

System Enhancement

Currently the Aggregate Fulfilment Ready to Invoice icon defaults to Red if there are no fulfilments attached to a job order.
The existing logic needs to be changed to include the following if clause :-

If job order has no fulfilment records attached, set Aggregate Fulfilment Ready to Invoice status to complete

When is a job ready to be Invoiced ?

Following on from the above sections which outline where and how the chargeable elements of a job order are captured, we can now outline how we can define when a job is ready to be invoiced.

Given that there up to four main categories of chargeable costs on any job order, a job is ready to be invoiced when:-

The following table summarises how these icons are set, and the departments responsible for how these icon statuses are set:-

Charge Category	Mechanism to Denote charges fully recorded	How mechanism is set	Responsible Departments
Origination	The Aggregate ArtWork charges Complete icon for a job is in a Green (Complete) status	Automatically sets to completed when the status for Art Charges Complete on all of the ArtWork records on the job has been manually updated to a Green (Completed) state.	The Art Room is responsible for manually setting the Art Work record's Art Charges Complete flag
Decoration	Decoration costs are captured as part of the process line population when writing up a job order.	Whilst the capture of the costs for processes and garment costs is part of the job order write up process, the actual quantity of garments (and thus processes applied) that can be invoiced is derived from the finalised produced numbers, and thus is captured via the data entry process. When data entry form is set as finished, the data entry status light for the job is set to Green (completed)	Production Admin are responsible for:- Entering Process costs against a job's process lines Entering garment costs / handling charges on a job order garment sheets The Quality Control area within the Production line are responsible for the final counts of produced goods which are then recorded in the data entry form as successfully produced, and it is this successfully produced quantity that is used as the chargeable Unit Qty multiple on the invoice.
Products	Garment Costs are captured against the Garment Sheet when writing up a job order.
Fulfilment	The Aggregate Fulfilment Ready to Invoice icon for a job is in a Green (Complete) status	Automatically sets to completed when the status for Ready to Invoice on all of the fulfilment records on the job has been manually updated to a Green (Completed) state. Enhancement:	The Fulfilment Department is responsible for manually setting the Ready to Invoice flag on a fulfilment record to Complete.

This layout (Navigation: Accounts>Jobs To be Invoiced) contains jobs that are eligible for invoicing, but have not yet been raised for invoice, grouped by Client, and then sorted by Date Required.

The three status lights referred to above are used in the Jobs to Be Invoiced Layout which specifically provides a found set of job orders according to the following logic:-

Raising Invoices for Jobs

Following on from above section, the Jobs to Be Invoiced Layout will lost those jobs which in simple terms:-

To raise an invoice for a job click the corresponding Invoice button against the record in this layout

System Enhancement
Phase 2 system enhancements will provide functionality to consolidate numerous job orders into a single invoice, and thus match a client's single PO that was broken down into numerous jobs within TOT.

Raising Invoices for Fulfilment Charges not included on Job Invoices

This functionality will be refined, but it is important to understand conceptually.

These scenarios will be catered for. Again this will be outlined in more detail in help topics in time, but in essence

To identify and create an invoice for the fulfilment charges the layout Fulfilments to be invoiced would be selected
This does the following:-

Creating Invoices for Goods In Handling Charges

Currently charges associated with processing the receipt of goods in are manually recorded on a spreadsheet that is maintained by the goods in department, and an invoice raised.

Details of how the invoice is raised as TBC, but there is functionality to create a stand-alone invoice and also to create Non job-line related charges.

System Enhancement
Phase 2 system enhancements will provide functionality on the purchase order records to capture charges associated with processing the P.O. and then enhance the Invoicing module to allow the creation of an invoice from PO charges.

Creating Invoices for Storage Charges

Creating "Stand Alone Invoices"

A standalone invoice - i.e. one not originated from a job order or fulfilment can be achieved by clicking on new record icon in the Invoices Layout

Field	Field Type	Value / Comment
Aggregate Artwork Charges complete (1)	Status Icon	Complete
Data Entry	Status Icon	Complete
Aggregate Fulfilment Ready for Invoice	Status Icon	Complete Note: this assumes the invoice is raised for a job only when the any fulfilment elements are ready. This is the initial approach taken, but the ability to raise a job invoice without the fulfilment element, and then subsequently raise an invoice for fulfilment elements (and additionally consolidate this with other "un-invoiced" fulfilment elements) has been developed but requires some additional refinement before being rolled out as working practice.
Invoiced	Status Icon	<> Green (Complete) This field denotes whether an Invoice has been raised against the job Red: Invoice has not been raised / not created Amber: Invoice has been created/ raised for the job - but not yet fully populated - i.e. not all of the chargeable elements recorded on the job been have been added on the created invoice. Green: Invoice has been raised for the job, and all the chargeable elements on the job have been added (or marked as not eligible for invoicing) on the invoice.
Invoice Not Required	Status Icon	<>Green (Complete) This can be manually set to Green via the Do Not Invoice button on the layout, when no invoice should be raised for the job - typically this is done when job order is a test order.
(1) System Enhancement Needed: This field is not yet available or exposed on this layout.