3.3.2 Sales Order with Cash Repayment

Cash repayment: overview

UNHRD Sales process includes the sales of items between Partners. As per the Memo from UNHRD Network Coordinator (Memorandum for Cash Repayment.pdf) this process can be applied to sale of items stored by UNHRD on behalf of External Partners and can't be applied on WFP stocks.

This process is usually applied when an External Partner requires the cash repayment of the items requested by another Partner, either internal or external, rather than approving the loan of same items. In case loan is not accepted, as a last resort, UNHRD can assist in purchasing stock from other partners. Cash Repayment should not be proposed and should be adopted ONLY as a last option Cash Repayment should not be proposed to external Partners and should be adopted only as a last option upon stock owner request. Customer Service has to ensure that the regular Loans and Borrowing process is utilized as much as possible, which is strategic for UNHRD. Cash Repayment is not a method to close an open loan and has nothing to do with a loan. In fact, the partner willing to buy NFIs is identified as a Buyer and the partner willing to sell NFIs is identified as a Seller. Cash Repayment process should not be offered and can be applied only if the Seller is in the position to issue an Invoice or a Debit Note to receive the payment of the items sold to other UNHRD Partners.

NOTE: Cash Repayment process is exclusively applicable if the External Partner acting as Seller is able to issue an Invoice or a Debit Note to be used for the settlement of the sale. Therefore, when UNHRD Customer Service assistant receives a request from an External Partner to apply the Cash Repayment process, he/she must ensure in advance that the Partner is clearly acquainted of the above requirement.

The process is separated in various phases: sale from seller's stock, procurement to buyer's stock and payment to seller. The Partner that approves to sale its materials is called Seller while the Partner that request for the materials is called Buyer. The Partner that acts as Seller is treated as Vendor and as such it is identified in the Cash Repayment process. Only External Partners can act as Vendor in the cash repayment process while items can be sold to either Internal or External Partners. UNHRD is not allowed to sell Inventory Stock recorded under WFP accounts. The Sales process managing this solution falls under standard UNHRD Sales procedure (i.e. 7% of MRC is applicable) while sales value is established by the External Partners acting as Vendors and mutually agreed by the Internal or External Buyers, as specified in Chapter 5 of UNHRD SOP. The value of the goods sold must be in line with the Invoice provided by the Partner acting as Seller.

The steps required to complete the Cash Repayment process are listed below:

1. Procurement of materials to Buyer’s stock: this is completed applying value of goods sold (i.e. Seller's Invoice value) and removed from the Seller's stock (i.e. MAP value)

2. Sale of materials from Seller’s stock: this is performed by applying value of goods sold (i.e. Seller's Invoice value) and removed from the Seller's stock (i.e. MAP value)

3. Payment to Seller: this reflects the value established by Seller and agreed by Buyer

Procurement of materials to Buyer’s stock

In case the Buyer is an External Partner, this part of the process is managed at Hub level by creating a POWM to receive the items under the Partner's stock. The Vendor code associated to the Partners that sales the NFI (the Seller) has to be picked from the list of WINGS Vendor Codes. In case the Partner does not have a Vendor Code associated in WINGS, the standard request to WFP Vendor Master for Warehouse Management purposes has to be submitted by UNHRD Focal Points for WFP Vendor Master issues. The value to be adopted has to match with value of Invoice provided by the seller and therefore in line with POJS; conversely value of goods removed from the Seller's stock has to match with MAP value of goods at the time will be sold to the buyer. The remaining POWM specifications have to be entered as for any POWM created for the receipt in Warehouse Management for External Partners NFIs:

NOTE POJSs can be released by Network Coordinator (NC) as last approving level. This is because POJSs have their own Purchase Organization code, i.e. UNJS, and thereof the release strategy falls under Corporate structure that foresees CD as second level of approval: being NC's approval equivalent to CD`s, second approval on POJS posted by UNHRD falls under Network Coordinator authority.

This part of the process is completed by posting the GR versus the POWM.

In case the Buyer is an Internal Partner, this part of the process is managed by WM experts at Support Office (SAN) by performing a manual upload (with Movement Type 561) adopting same material code and applying the value reported on the Invoice provided by the seller and therefore in line with POJS.

Sale of materials from Seller’s stock

This part of the process is managed by performing a manual decrease of stock from the Partner that sells the items in stock, the Seller. This action is performed by WM Experts at Support Office (SAN) upon receipt of confirmation for sale including material code, WBS of Seller and quantity and by applying a specific Movement Type - i.e. 567 - dedicated to Cash Repayment process. The value of decrease from Seller stock reflects the actual MAP value:

Payment to Seller

This part of the process is started at Hub Level by following below steps:

• 1: Once Customer Service Representative obtains the Invoice from the Partner acting as Vendor, a Purchase Requisition for Services has to be created. Account assignment to be adopted in the PRS has to be P for "Project' while the Item Category has to be left empty (this reflects the procurement of NFIs from the Partner acting as Vendor). PRS has to be releases by following the standard Corporate process.
• 2: Customer Service Representative creates the PO for Services from the PRS by selecting the Partner's associated Vendor number, adopting UNJS for ‘UN Joint & Statutory’ as Purchase Organisation, and the owned Purchasing group (e.g. AE9, IT9, GH9, etc.).

If it does not exist in WINGS Vendor database, Customer Service Representative has to request the creation of a new Vendor by following the standard Corporate process. The rest of the information is derived from the PRS created in previous step. POS has to be releases by following the standard process.

• 3: Logistics Staff post the GR versus the POS
• 4: The process is completed by UNHRD Finance by performing the payment versus the POS and GR created.