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An analysis pattern for invoice processing

Article · August 2009

DOI: 10.1145/1943226.1943239

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 An Analysis Pattern for Invoice Processing
Eduardo B. Fernandez1 and Xiaohong Yuan2
1
Department of Computer Science and Engineering
Florida Atlantic University, Boca Raton, FL
2
Department of Computer Science
North Carolina A&T State University, Greensboro, NC

Abstract
We discuss an analysis pattern for invoice processing. The pattern describes events such as the
creation and validation of an invoice, followed by the payment process. This pattern is composed of
two simpler patterns that describe the creation and payment of the invoice, respectively. The
composite pattern represents a minimum application so that it can be applied to a variety of
situations and it can be combined with other related patterns to describe more complex applications.
The component patterns have value of their own and can be used independently.

1. Introduction

Invoices are used in all places where services or products are provided and they usually contain a
list of charges for the services or products rendered. In some environments, e.g. a supermarket,
invoices are delivered right away, or they can be delivered via email or post mail. After the invoice
has been received, it must be paid, which involves different methods from which one can choose.
We present here an analysis pattern that describes the processing of an invoice, including its
creation and its payment. This pattern is an example of a Semantic Analysis Pattern as it expresses
semantic aspects of the model. Following the concepts behind this type of pattern [Fer00a], we
describe a set of use cases that together illustrate its idea. The pattern is a composite pattern and we
present first its two components, Invoice Creator and Invoice Payment, which we combine later into
an Invoice Processing pattern. The component patterns have value of their own and can be used
independently; however, if both aspects are needed the composite pattern presents some advantages
over the independent application of each one. Notice that we do not care about the specific contents
of the invoice, there are many varieties which are discussed in books such as [Fow97, Hay96,
Sil01]; our emphasis is on the needed processing.

The intents of the presented patterns are:

Invoice Creation. Describe the process of creating and preparing an invoice for a product or
service, followed by its validation.

Invoice Payment. Allow a client to make a payment for an invoice corresponding to services used
and/or products bought.

Invoice Processing. Describe the conceptual steps of invoice processing, including its creation,
preparation, validation, and payment.

1
2. Invoice Creation
Describe the process of creating and preparing an invoice for a product or service, followed by its
validation.

2.1 Context

This pattern is valuable for institutions or enterprises of any type that require payment for products
or services. In some cases the customers may have registered or opened accounts with these
institutions but that is not a necessary condition.

2.2 Problem

In order for a client to pay for the services provided or for the products she bought, an invoice needs
to be created that describes what should be paid, including rules and conditions. The process of
preparing such an invoice can be rather complex and also time consuming. Different systems deal
with this process in a different way, but they all have common aspects; however, we need a
systematic and uniform way of preparing invoices.

The following forces affect the solution:

• In the creation of an invoice, there can be more than one actor involved, so some ordering of
actions between these parties has to be defined.
• Items in an invoice can have different discounts and can belong to various categories which are
managed differently, so the preparation of the invoice needs to be done according to specified
procedures and policies.
• The invoice may specify different ways of payment and other conditions, so we must define
them explicitly.
• We need to validate that the invoice is complete and in a valid state before we send it.
• Preparation and validation should be done by different people (separation of duty).
• We need to keep track of who created an invoice.
• There are invoices which are not bills of sale, like for example the 'shipping invoice' which
details all the parts that are included in the specific order. So, some information that we include
into the invoice has to be optional, while other information has to be mandatory.

2.3 Solution

First, a user creates and prepares the invoice according to predefined institution procedures; then
another user validates it. The stakeholders that participate in this process are the creator of the
Invoice and the Invoice Validator. The following use cases correspond to these situations:

1) Create and Prepare Invoice. After the purchasing of products and delivering of services, a
document is issued, which incorporates all the relevant items and their costs. This step can be
done automatically or manually either by a person or by a group of persons. After an invoice has
been created, we have to add the products or services to it and supply additional information
regarding every item from the invoice.

2
2) Validate Invoice. After an invoice has been created and prepared, it has to be validated by either
a system or a person. This step ensures that the quality and completeness of the invoice are met.

Figure 1 is a class diagram for the realization of these use cases. Class InvoiceCreator defines an
interface for creating an invoice. It also provides a way of preparing the invoice by adding or
deleting items from it, specifying different properties, which are used to derive the final scope of
the invoice. Class Invoice represents the document in which all the goods or services are
incorporated together with the nature of each item. Class InvoiceValidator is used to ensure that
the invoice that resulted from the steps described above is in a consistent form that complies with
the trade usage [Cro]. Classes BillingPolicy and Validation Rule include business policies that
apply to the preparation and validation of invoices.

<<interface>> Invoice
InvoiceCreator create and prepare
1 * invoiceID
type date
time
*
1 itemsBought
totalAmount
create
discounts
isValid
appliesTo *
Employee * *
name *
validate

*
* 1
BillingPolicy <<interface>> ValidationRule
date validate InvoiceValidator
* * date
* isValidInvoice appliesTo

Figure 1. Class diagram for Invoice Creation

Figure 2 shows a sequence diagram for creating, preparing and validating an invoice. After created,
the invoice may be initialized. The creator adds items and other specific information until there are
no more items to be added to the invoice. After each item is added the cumulative amount is
calculated. Once all the items have been supplied, the invoice signals the validator that the invoice
is complete. After validation the invoice is ready to be sent.

2.4 Consequences

3
The pattern provides the following benefits:

• It describes an abstract invoice preparation process that can be tailored to different specific
situations.
• We can separate specific stages of preparation along the invoice preparation process and their
ordering.
• The creator and the validator of the invoice are roles; that is they can be performed by the same
or different individuals. They can also be performed by groups of people.
• We can apply the separation of duty principle by having different users perform creation and
validation through different interfaces with access control.
• We can keep track of who prepared and who validated an invoice.
• Every characteristic of the use case is represented in this pattern, without providing any
implementation aspects, which leaves it open to different possibilities.
• There are many ways of preparing an invoice, this pattern defines an abstract view of its
essential aspects and it can be adapted so that it fits any scenario.
• We can add explicit authorizations to each action; in particular, creation and validation can be
restricted to specific actors.

Several liabilities of the pattern can be defined in terms of the aspects that were not covered, such
as:
• Different types of creators and validators. This depends on the system, and can range from
creators that are individuals to creators that are software programs or institutions (parties).
• The specific contents of the invoice depend on accounting practices. [Hay96] and [Sil01]
provide details of these aspects.

<<actor>> <<actor>>
:Creator :InvoiceValidator

create()
:Invoice

initialize()

loop -[more items]-

addItem(item)

calculateAmount()
[complete]

validate()

Figure 2. Creating, preparing and validating an invoice

4
2.5 Known uses

Some examples of use for this pattern are:

• A point-of-sale system in any department store that sells products, such as Macy’s.
• An on-line shopping store, where people use the Internet to log onto an on-line shop in order to
buy different items, e.g. Amazon.
• Monthly invoicing for telephone or internet service, e.g. Comcast.
• SAP has an Invoice management product where they create and prepare invoices [SAP].

2.6 Related patterns

• Creation of invoices may use a Factory pattern [Gam94] in the design stage.
• The Account pattern [Fer02] defines accounts where the invoice costs may be charged.
• A Strategy pattern [Gam94] can be used to select different ways to calculate prices [Pie].
• Billing policies can be defined using a Business Rule pattern [Ars00].
• Fowler [Fow97], Hay [Hay96], and Silverston [Sil01] deal with accounts and describe how
invoices are produced but don’t show their handling.

3. Invoice Payment

Allow a client to make a payment for an invoice corresponding to services used and/or products
bought.

3.1 Context

This pattern is valuable for institutions or enterprises of any type that require payment for products
or services. In some cases the customers may have registered or opened accounts with these
institutions but that is not a necessary condition.

3.2 Problem

A client has to be able to pay an invoice in a way convenient to him; this implies that different
payment methods have to be incorporated in the payment process, so that a client can elect the best
option that fits his needs. Such a payment has to be validated in order for both the client and the
system to have confirmation that the payment has been done in an appropriate way.

The solution is affected by the following forces:

• We need to provide different possibilities to make a payment for an invoice; otherwise we might
lose customers.
• The system and the client need a convenient way of keeping track of the payments made.
• Validation of every received payment has to be made to ensure that the client’s information is
correct and in accordance to the requirements and regulations of each system.

5
• We need to keep track of who validated a payment.

3.3 Solution

Separate the validation approach from the payment so we can apply different validation approaches.
It should be noticed that an invoice could be sent before or after the actual payment has been made.
Such flexibility is incorporated in the design by separating this process.

Figure 3 shows the class diagram for Invoice Payment. The Invoice class represents the amount that
must be paid by the customer. The Payment class represents the payment made by the client for the
products and/or services incorporated in the invoice. It should incorporate information related to the
invoice for which the payment is being made, the payment method chosen, the id of the client that
makes the payment. The PaymentValidator validates payments according to ValidationRules.
Employee keeps track of who validated a payment. The Customer class represents the customer
that makes payments for the given invoice.

Employee <<interface>> ValidationRule

1 * PaymentValidator* * date
name
validate idValidPayment appliesTo

1
validates

*
Invoice Payment
idInvoice paymentFor idPaymentMethod
itemsBought
totalSum 1 *
discounts
**
pay

1
Customer
idClient

Figure 3 Class Diagram for Invoice Payment

Figure 4 shows the sequence diagram for payment of an invoice. A Client initiates the payment
process by making a payment according to the total sum in the invoice. The Payment is validated by
the PaymentValidator, according to the validation rules, after which the status of the payment is
returned to the client.

6
 Figure 4 Sequence diagram for Invoice Payment

A Payment can be in the following states: Active, Paid, and Validated. When the invoice is sent,
payment is activated. After the customer has paid (Payment in Paid state), his payment needs to be
validated. After the validation process has been completed, the payment is closed.

3.4 Consequences

This pattern has the following advantages:

• It allows to control and keep track of who validated payments.
• The payments can be related to its corresponding invoice.
• We can apply different validation rules to a payment.
• We can indicate different ways to pay an invoice by adding classes to Payment as in [Hay96] or
[Sil01].

In the liabilities we can mention that aspects such as payment in installments or payments by check,
have been left out.

3.5 Known uses

Some examples of use for this pattern are:

• A point-of-sale system in any department store that sells products, such as Macy’s.
• An on-line shopping store, where people use the Internet to log onto an on-line shop in order to
buy different items, e.g. Amazon.

7
• Monthly invoicing for telephone or internet service, e.g. Comcast.
• SAP has an Invoice management product where they create and prepare invoices [SAP].

3.6 Related patterns

• This pattern may include a Factory pattern [Gam94] to create payments.

• The Validation Rule could be an instance of the Business Rule pattern [Ars00].
• Fowler [Fow97], Hay [Hay96], and Silverston [Sil01] deal with accounts and describe how
invoices are produced but don’t show their handling.
• A pattern Pay For The Resource Transaction [Bra99], describes the process of paying a bill in
installments.

4. Invoice Processing

Describe the conceptual steps of invoice processing, including its creation, preparation, validation,
and payment.

4.1 Context

This pattern is valuable for institutions or enterprises of any type that require payment for products
or services. In some cases the customers may have registered or opened accounts with these
institutions but that is not a necessary condition.

4.2 Problem

There are many systems where we need to combine the functions of creating and preparing an
invoice, and paying that invoice, including the corresponding validations. How do we represent this
process in a general and abstract manner?

The solution is affected by the following forces:

• The creation, preparation, and validation of an invoice requires specific actors, actions in
specific sequences, and must follow specific rules.
• Preparation and validation should be done by different people (separation of duty).
• There should be flexibility about who is responsible for a payment and how the payments will
be made.
• The system and the client need a convenient way of keeping track of the payments made.
• Validation of every prepared invoice and every received payment has to be made to ensure that
the client’s information is correct and in accordance to the requirements and regulations of each
system.
• We need to keep track of who created an invoice, who validated it, and who validated a payment

4.3 Solution

Combine the solutions of the two component patterns, Invoice Creator and Invoice Payment. Figure
6 shows the class model of this pattern as a combination of the two previous class models. The

8
sequence diagrams of Figures 2 and 4 still apply. Figure 7 shows the activity diagram of creating
and paying for an invoice.

4.4 Consequences

This pattern combines the consequences of its component patterns plus:

• The actors, the sequence of their actions, and the corresponding business rules can be changed
easily.
• We can control who performs specific actions on invoices and we can keep track of who
performed these actions.
• It is easy to add new payment methods or types of customers.
• Clients and systems can keep track of the payments made.
• We can conveniently validate the preparation of invoices and the reception of payments.
• We can show the required sequence of the activities in both component patterns.
• We can define a secure version of this pattern applying instances of the Role-Based Access
Control pattern as we have done for analysis patterns describing law applications [Fer07] and
others.

The pattern has the following liabilities:

• We left out details of the customers. Those can be found in [Hay96] or [Sil01].
• We did not consider specific ways of payment. They also can be found in [Hay96] or [Sil01].
• We did not consider physical delivery and storage of invoices. They are considered in [Net09].

4.5 Known uses

Some examples of use for this pattern are:

• A point-of-sale system in any department store that sells products, such as Macy’s.
• An on-line shopping store, where people use the Internet to log onto an on-line shop in order to
buy different items, e.g. Amazon.
• Monthly invoicing for telephone or internet service, e.g. Comcast.
• SAP has an Invoice management product where they create and prepare invoices [SAP].

4.6 Related patterns

• Creation and payment of invoices may use a Factory pattern [Gam94].

• The Account pattern [Fer02, Fow97] defines accounts where the invoice costs may be charged.
• A Strategy pattern [Gam94] can be used to select different ways to calculate prices or discounts.
• Billing and payment policies can be defined using a Business Rule pattern [Ars00].
• The Order and Shipment pattern [Fer00b], describes how a customer can place an order for a
product and the subsequent shipment of the product.
• Internet shops may require invoicing [Fer01].
• The contents of invoices can be found in [Fow97], [Hay96], and [Sil01].
• Creation and delivery of invoices is considered in [Net09].

9
Acknowledgements

Mihai Fonoage started this pattern as a class project. Our shepherd, Rosana T. Braga provided
valuable comments.

* validate
Employee
create name * validate
*

*
accountableFor

* * *
Invoice
<<interface>> validatedBy <<interface>>
invoiceID * 1 InvoiceValidator
InvoiceCreator
date
type create time isValidInvoice
1 * itemsBought
totalAmount
discounts
1 *
applies applies
1
* isPaidBy *
BillingPolicy * Validation Rule
Payment
date * date
idPaymentMethod
idClient
*
validatedBy appliesTo
*
*
<<interface>>
isPaidBy
PaymentValidator
1 1 *
Customer idValidPayment
idClient

Figure 5. Class diagram for Invoice and Payment

10
 Invoice Payment

create

prepare

validate

send
create

make payment

validate payment

receive payment

Figure 6. Activity diagram for Invoice and Payment

References

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