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17 Invoice Processing Process Fs6rk4

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26 views20 pages

17 Invoice Processing Process Fs6rk4

Uploaded by

singh24rohan2026
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Invoice Processing

Things we will Cover


Today:
What is Key details
What is
Invoice Invoice
Invoice?
Processing? contains?

Stages of
Types of Common
Invoice
Invoices? challenges?
Processing?
What is Invoice Processing?
Think of invoice processing as the journey an invoice takes
from arriving at your doorstep to getting paid. It involves
verifying details, getting approvals, making payments, and
keeping records. It's crucial for smooth cash flow, happy
vendors, and accurate accounting.
What is Invoice?
It's a document that tells a
company how much they
owe someone for something
they bought, like products
or services.
Key details an Invoice contains
An invoice typically contains several key details,
which can be grouped into three main categories:

1. Seller and Buyer Information,

2. Invoice Details,

3. Product or Service Details.


1. Seller and Buyer Information:

Seller: This includes the company name, address, and


contact information of the business sending the invoice.
Buyer: This includes the company name, address, and
contact information of the business receiving the invoice.

2. Invoice Details:

Invoice Number: A unique identifier for the invoice, used


for tracking and reference.
Invoice Date: The date on which the invoice was issued.
Payment Due Date: The date by which the payment is
expected.
Purchase Order (PO) Number: If applicable, the
reference number of the purchase order associated with the
invoice.
3. Product or Service Details:

Description: A clear and concise description of the product or


service provided.
Quantity: The number of units of each product or service
provided.
Unit Price: The price per unit of each product or service.
Total Price: The total cost for each item, calculated by
multiplying the quantity by the unit price.
Subtotal: The sum of all individual item prices before taxes and
discounts.
Taxes: The amount of tax applied to the subtotal, depending on
location and type of product/service.
Discounts: Any discounts offered on the total price, if
applicable.
Additional details may also be included,
depending on the specific transaction:
Payment terms: Information about
acceptable payment methods and any
potential late fees.

Notes: Any additional information


relevant to the invoice, such as delivery
details or warranty information.
Types of Invoice: PO Invoice

PO-Based: These are the invoice against which we


have a PO available, making verification easier.

Non-PO-Based: These are the invoices against which we do


not have any PO available, making verification harder and
requiring more scrutiny compared to PO invoices. Non-PO Invoice
Key stages of Invoice Processing:
Step 1: Receiving the Invoice

First step of Invoice processing process is receiving the invoice. Invoices can
arrive via email, mail, or even online portals. Regardless, capture the
information digitally for faster processing.

Email Online portals


Mail
Key stages of Invoice Processing:
Step 2: Verification:

You'll need to:

• Match the invoice to a PO (if applicable).


• Verify vendor information and contact details.
• Check product/service descriptions and
quantities.
• Scrutinize prices and calculations.
• Confirm tax rates and compliance.
Step 3: Approval Workflow

Depending on the amount and complexity, different people might need to approve the invoice:

Department Finance
Head: Verifies Manager: Checks
accuracy and adherence to
goods/services received.
budget.

CEO/CFO: Signs off


on large expenditures.
Step 4: Payment Processing
Once approved, it's time to pay!
Popular methods include (but not limited to):

Checks: Traditional, but


slower and prone to delays.

ACH Credit
transfers: Electronic, cards: Convenient, but
secure, and faster. with processing fees
Step 5: Archiving and Reporting

The store paid invoices securely for future reference and


audits. Use accounting software to generate reports on
spending trends and vendor performance.

Bonus Tips

• We can negotiate payment terms with vendors for early payment


discounts.
• Invest in invoice processing software (at company level) to save time
and reduce errors.
• Set up clear communication channels with vendors to avoid delays.
• Train our team on proper invoice processing procedures.
Some common challenges we might face in
Invoice Processing.

Approval Missing
Delays: Information:
Approval delays Incomplete
can impact the
entire payment
invoices can be
process. a headache.

Data Entry Errors:


Accuracy is
key!
Best practices for Automation Tools: Embracing automation
efficient invoice
1.
can significantly speed up the process and
reduce errors.
processing!
Best practices for efficient invoice
processing!
Effective Communication: Communication is key in any process; we need to form proper
communication channels within our organization and with suppliers or vendors.
Best practices for efficient invoice
processing!
Regular Audits: Regular audits helps in identifying and rectifying any discrepancies, and we can
work on these improvement areas to strive process excellence.

Remember, a smooth process means happy vendors, accurate financials, and more time for you to
focus on what truly matters.
Important Interview Questions
1. What is the difference between a PO-based and non-PO-based invoice?
2. What are the key details you look for when reviewing an invoice?
3. Explain the process of verifying invoice accuracy.
4. What are some common errors you encounter in invoices?
5. How do you handle discrepancies between an invoice and a purchase order?
6. Given an invoice with missing information, how would you proceed?
7. How do you calculate the total amount due on an invoice with multiple tax rates?
8. Explain how you would identify potential fraud on an invoice.
9. If an invoice arrives past the due date, what steps would you take?
10.How do you prioritize invoices for processing based on urgency and value?
11.Describe a situation where you had to resolve a dispute with a vendor over an invoice.
12.How would you respond to a vendor who is pressuring you to pay an invoice early?
13.Imagine you receive an invoice for a service you did not order. How would you handle it?
14.A colleague questions the validity of an invoice. How would you approach this situation?
15.You are processing a large invoice with complex calculations. How would you ensure accuracy?
16.How comfortable are you communicating with vendors about invoice issues?
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