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Invoice Matching for IT VAR’s

Blogpost by: Adam Stanier
From: dinsdag 27 augustus 2013

For IT companies where margins are low and the number of administrative processes is high, is it imperative that you are being charged the correct value for the goods you have purchased in order to protect your margin?

The only way to manage this by the time you have received your invoice is through Invoice matching against the original Purchase Order, which can be an administrative burden if your business processes many purchase orders and you are not set up to support this electronically. 

Purchase Orders need to be raised; Invoices have to be received, entered, stored and kept securely and may include an authorization process. If the Invoice therefore differs from the original Purchase Order then a Credit needs to be raised and the entire process needs to be repeated.

It is therefore important to consider the communications prior to the invoice being received to avoid unnecessary administration; by using real time pricing information from your suppliers you have a much higher chance of the purchase price aligning with the price that the supplier has stored. Monitoring the Order status notifications will also help to highlight any pricing discrepancies prior to any goods being dispatched or invoices being raised. 

Many ERP or financial systems have functionality built in to enable invoice matching to be performed automatically. Capturing the discrepancy prior to the invoice being received will typically be the cheapest and most efficient way of handling pricing variations from your suppliers.

Research studies from PriceWaterhouseCoopers claim the average cost to process an invoice is $24 (approx. £15). Increasing the use of up to date or real time supplier pricing and running checks during the purchasing process, companies quickly reduce their labor and overhead in the accounts department and will see a tangible ROI based on implementing a suitable solution.

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Adam Stanier

Business Development Manager UK & Ireland

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