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August 12, 2022
Invoices can often contain mistakes, making it critical to have a robust mechanism for their verification. Learn how you can achieve that through this article.
Nothing more can go wrong for a company than paying a wrong invoice or settling twice for the same thing. Businesses of all scales need to deal with invoices, which is a critical part of the sales process. The more the number of invoices your accounts team deals with more the chances of costly errors that can set back your business by hundreds and thousands of dollars.
Invoice verification is thus a critical task that your accounts team needs to follow. But what exactly is it? What are the various steps involved in the process? What internal resources do you need to match invoices? Can automation play a role here? This guide answers all the pertinent questions you may have regarding invoice verification.
According to a study, almost 61% of late payments happen due to incorrect invoices. The invoice verification process thus assumes a lot of importance. It is essential to remember that an invoice is not just a piece of paper with numbers on it. It is a legal document. If there are mistakes on an invoice, it may take longer for the seller to get paid for their services.
As the first step in the process, invoice verification involves checking the details of an invoice against a purchase order. The purpose is to ensure the pricing on an invoice is accurate and there are no errors in item descriptions or quantities. The process also helps you identify discrepancies between what a customer ordered and if everything is as it should be.
Here are the three ways your business can verify an invoice.
Matching invoices with purchase orders is a time-honored way to verify your invoices. It involves cross-referencing the information on the invoice, including price, quantity, and description, with the purchase order information. If there are any discrepancies, you should investigate them further before proceeding with payment.
One of the other methods to verify an invoice is by matching it with a goods receipt. You can compare the details on both documents, such as vendor name and address, item description, quantity, and price.
Your accounts team may not have a purchase order (PO) to verify with the invoice. In these cases, your team would have to involve concerned stakeholders to ensure the invoice's validity.
Here are the various steps involved in the process of verifying an invoice.
Once you have received an invoice, you can check it against the purchase order to ensure each information item matches accurately. If there are any discrepancies, your team will have to contact the supplier to get them corrected.
The invoice date is one of the vital parts of the verification process as it tells you when you need to pay the supplier. The date is usually on the top right-hand side of the invoice. It will also help your team know if they have not missed the payment deadline. Some service providers may have a late fee in case of delayed payments, which may prove costly.
This is a step in the process where your accounts team will ask the project manager to confirm if the services listed on the invoice were provided. The project manager will also need to check the accuracy of item quantities and their unit price, which can remain prone to discrepancies.
When you get an invoice from a vendor, you want to ensure it is real. You do not want to pay for something that is not real or authorized by your company. Furthermore, you also do not want to be taken advantage of by vendors who do not have your best interests at heart. Crosschecking vendor details in the database will help at this step.
Once your team ensures everything is in place, they can schedule the payment. It requires careful execution of the earlier steps. For example, your team should ensure that every detail is correct and there are enough approvals before they make the payment.
Here is a handy checklist your accounts team can adopt for invoice verification.
It is essential to ensure you do not pay the invoice twice, especially if it is a big one. If you are worried that you have already paid this invoice or that there are multiple invoices for the same service or product, check your bank statements and accounting software.
When you receive an invoice, you might find some discrepancies or issues. Resolving them is essential as it will help you to have an accurate record of your expenses and allow you to pay accurately for what you owe.
It is critical to match the invoice with supporting documents before making payment. It will prevent you from paying for unwanted goods and services. Similarly, if there is a discrepancy and you pay more than what you should, you may face problems getting reimbursed.
Here are various documents you will need at the time of invoice verification.
Receiving fake invoices is not uncommon for businesses. Here are several signs of a bogus invoice.
If the invoice is for something you did not purchase, it is likely a fake invoice. Look at the invoice details and see if it matches up with anything you have ordered or done business with. If not, you are likely getting scammed.
If the invoice has an unusually high amount, it could be a scammer trying to get your money by inflating their price. Check with your company's internal departments or call them directly to clear the concerns about the invoice.
If the sender asks for information or actions that do not seem right, check into it further before sending any payment information or making payment—it could be a scam.
Consider it a red flag if you receive an invoice with links to suspicious websites. Fake invoices often include embedded links that direct you to scam websites. These sites may look like the real thing but are set up by cybercriminals to trick you into divulging sensitive information or downloading malware onto your systems.
VisionERA is a cutting-edge Intelligent Document Processing (IDP) platform that allows you to process invoices swiftly and accurately. It is ideal for document-heavy businesses that want to automate their time-consuming manual processes. Organizations using VisionERA can process their documents 20x faster and help their teams experience 3x productivity.
VisonERA comes with a 100% performance guarantee and a continuous learning mechanism. It can quickly adapt to your business needs and operate with continually increasing speed and accuracy. The platform also offers seamless functionality through its plug-and-play and drag-and-drop options, which your team will love working on.
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