Invoice Reconciliation

Purchasing and Accounts Payable (A/P) departments have a common goal of paying invoices as efficiently as possible. However, the process of verifying that the correct goods or services were received and that the prices charged are accurate can be time-consuming. This is where invoice reconciliation comes in.

Invoice reconciliation is the process of comparing an organization’s purchase order record with the supplier’s Invoice to determine if there are any discrepancies. These discrepancies could be due to errors in either the purchase order or invoice, or they could be the result of fraudulent activity.

Organizations need to have an effective invoice reconciliation process in place to ensure that all invoices are paid accurately and on time. This process should be designed to catch errors and discrepancies as early as possible so that they can be corrected before payment is made.

There are several steps involved in reconciling an invoice:

1. Receiving and entering the purchase order into the accounting system

2. Receiving and entering the supplier invoice into the accounting system

3. Comparing the purchase order record with the supplier invoice

4. Identifying any discrepancies between the two records

5. Investigating and resolving any discrepancies identified

6. Approving the supplier invoice for payment

7. Making payment to the supplier