How can you simplify invoice reconciliation for your team?

Receipt capture software like Dext, Hubdoc and Autoentry really help to speed up the process of getting invoice information into your bookkeeping/accounting software, but even though scanning or taking a photo of an invoice is easy to do, it still is easy not to do. I highly suggest once a week reviewing the missing items in the bank reconciliation and producing a missing items list. Get the team to commit to uploading their receipts and invoices weekly. Left any longer than that and emails get buried, purses and wallets get emptied and glove boxes get cleared.

Simplifying invoice reconciliation for your team involves streamlining the process and leveraging technology to increase efficiency. Implement invoice management software or tools that automate the reconciliation process, create standardized procedures for handling invoices across departments or vendors. Establish clear guidelines for coding, approvals, and documentation to ensure consistency, use a centralized system or database where all invoices and related documents are stored. This facilitates easy access, improves visibility, and reduces the chances of missing or duplicate invoices, Optical Character Recognition (OCR) technology can extract data from invoices, provide training to your team on using new tools or software effectively.

Automate the process with software solutions that match invoices to purchase orders and receipts, reducing manual effort. Implement clear coding and categorization conventions for easy identification. Regularly update and streamline reconciliation procedures, and provide training to ensure the team is proficient with the tools, minimizing errors and accelerating the reconciliation process.

Utilize software to automatically capture and import invoice data from emails, PDFs, or online portals. This eliminates manual data entry errors and saves your team significant time.

OCR software support can reduce time spent for entry key invoice data to up to 80%, but is heavily depending on quality of visual image of data. Still clear instructions and periodical survailance of dedicated employees in AP are required to in order to eliminate errors. Predifined cost centres split and GL posting schedules by regular supplier can save some time as well.

Using a standard format reduces probability of errors and keeps all processes within set expectations and helps to identify inconsistency

Using some of the widely recognised software sollutions helps to skip some effort in creating your standard form and keeps them equalised to other business partners (BP). Always try to understand what data are crucial in business papers for majority of your BP's and try to indulge them (f.i. purchase order numbers, number of carrier, etc). Implement this in your business policy and software (in masterdata). This will keep number of errors and invoice rejections down.

I agree, but it should be noted that there must be opportunity for some nuances, especially in an Agile environment. This would also ensure that any curveballs stakeholders through are essentially catered for before they ask.

The biggest roadblock on streamlining any process which involves documents/ information from external sources is uniformity. The AI/ software works on a bunch of preloaded instructions or triggers on collecting information from a document. But when all the external documents are mandated to be in a required format, the error margin on such processes decrease. It's not just the essential information such as invoice number, date, supplier name, item description, quantity, price, tax, and payment terms- but also the format and the configuration of the file, the system should be studied thoroughly to understand the triggers and a clear set of specifications should be drawn.

Current accounting software has standard formats for these documents which generally can be modified to your needs. Identify the need and design documents accordingly. Whatever helps the end-user can be prepared. Utilize the software as much as possible.

In my experience - Invoice reconciliation is one of the very easy aspect for any accounting team. Receivables walk parallel to payables, anybody can link it and make an effective process to simplify it.

There are plenty of Accounts Payable (AP) Management module which are based on workflows right from Purchase Requisition till invoice payment. I worked on Oracle's Source to Procure to Pay (S2P2P) platform which had the following workflow- 1) Purchase requisition (PR) creation by the requesting department 2) Supplier submission of quotation for the requested PR 3) Approving the Requisition for Purchase (RFP) by the requesting department head 4) Automatic issuance of Purchase Order (PO) to the approved supplier 5) Goods Receipt Note (GRN) by the respective department once the goods are delivered/service is rendered 6) Invoice submission by the supplier 7) Payment for the submitted invoice once all the approvals are in place

Establishing a structured workflow is crucial for efficient invoice reconciliation. Define clear steps from the receipt of an invoice to its verification, approval, and eventual reconciliation. A well defined workflow ensures that each team member knows their responsibilities, minimizing bottlenecks, and contributes to a seamless reconciliation process.

Develop a clear, step-by-step workflow for invoice processing and reconciliation. This should include who is responsible for each step, the timeline for processing, and the procedure for handling discrepancies. Workflow tools tailored for SMEs can help in managing this process efficiently

With sales invoices integration for revenues, you will ensure that the details of the services offered can be tracked with actual billings and be verified for ensuring that your revenues are complete.

Integration of different systems not only allows efficiency but it also means that the data input is likely to be more accurate. Linking different systems can also help with reporting and analytics

As mentioned in point 1 above, an integrated system will be highly beneficial. In my experience, an ERP system is the best choice

Proper integration produces efficacy on flow of information, and enables the Payables System to avoid error that can occur during production of invoices and payment.

Integration of different systems or applications with your ERP platforms is always less time consuming and more accurate. We can avoid manual posting and duplication of data. It will help in analysing data in details and can be top on controlling your finances.

Regular periodic review and reconciliation can assist to prevent errors. The Internal audit teams should take the lead in carrying out periodic reviews.

Robust Accounts Payable (AP) Management modules have improved visibility to respective stakeholders on the overall invoicing process. As highlighted above in the workflow module, in Oracle's Source to Procure to Pay (S2P2P), real time reports were available for review on each process stream. To mention a few- 1) Ageing reports for pending approvals for Purchase Requisition 2) Ageing reports for Open Purchase Order report to track the status of pending deliveries by suppliers 3) Ageing reports for pending invoice submission by suppliers where GRN is done 4) Ageing reports for pending payments after invoice is booked Performing timely review of these reports led to improved efficiency and timely payment of supplier invoices.

One thing i have found helpful was daily reconciliation was useful ofcourse some companies might do it differently depending on the size or number of accounts that need monitoring.

Regular reviews can prevent the accumulation of discrepancies and errors. Set a schedule for frequent reconciliation (e.g., weekly or bi-weekly), which is easier to manage than handling a large volume of invoices at month-end

Training and communication are essential components of any job function within the company. A well-trained team is better equipped to handle their responsibilities and can actively contribute to process improvements. Additionally, effective communication is crucial, particularly in setting expectations for the function, ensuring that the team aligns with the company's goals.

Ensure that your team is well-trained in using the chosen software and understands the reconciliation process. Regular communication about any updates in processes or tools is crucial. A well-informed team can handle reconciliation more effectively and efficiently.

Broadly all points are covered however in my opinion in this age it's all about what controls have been built in and around the system... Eg Supplier Universe, coding, PO controls, Grn authorisation, Gr/IR recon, Validation controls, Alerts, exception reporting, 4 eye controls...level of manual interventions... Review of complete trail or process

Portal for invoice upload Use a DMS to design an online portal for your supplier where they can add the invoice contents (using xml, etc. or manually) and upload their invoices. This information can be utilized to trigger workflows in the DMS and match the invoices against your POs, GRNs, etc.

Companies need to have robust Accounts Payable (AP) Management system which will ensure the downstream processes are smooth including the invoice reconciliation. Robust AP management system to include below sub-processes - 1) No Purchase Order (PO), No payment policy ( threshold to depend on the size of the organisation) 2) Goods Receipt Note (GRN) by respective departments ensuring the controls around receipt of goods/delivery of services 3) Ledger and Sub-Ledger concept of accounting for invoice booking 4) and lastly reconciliation of invoices If the above processes are in place, the downstream work on the invoice reconciliation will be way smoother and might eliminate the automation requirements.

For smaller entities, maintaining a lean and efficient reconciliation process is key. This might involve: Using cloud-based accounting tools that are more affordable and scalable. Leveraging mobile apps for on-the-go invoice management and approvals, which can be particularly useful for SMEs. Utilizing digital banking services that offer simplified reconciliation features. Considering outsourcing some financial processes if in-house resources are limited.