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Purchase Order Invoice

A purchase order invoice is a document that is sent by a seller to a buyer, typically after the seller has provided the goods or services that were agreed upon in the purchase order. The invoice typically includes details about the transaction, such as the items or services that were purchased, the quantity, the price, and the total amount due. It may also include payment terms and instructions for how the buyer should pay the invoice. The purpose of a purchase order invoice is to provide the buyer with a record of the transaction and to request payment for the goods or services that were provided.

Manual Processing of Purchase Order Invoices

When invoices come into the organization you manage them manually as follows:

    • Set up a system for organizing and storing invoices: This could include creating a dedicated physical or digital folder for storing invoices, as well as establishing a naming convention or numbering system for tracking and identifying invoices.

    • Review each invoice carefully: Before paying an invoice, it's important to carefully review the details to ensure that the goods or services were delivered as agreed upon, and that the invoice has not already been paid -- also known as 3-way matching.

    • Address any discrepancies or issues promptly: If there are any discrepancies or issues with an invoice, it's important to contact the seller promptly to resolve the problem. This may involve negotiating a resolution, such as requesting a credit or refund for goods or services that were not delivered as promised.

    • Process and pay invoices according to the payment terms: Once an invoice has been reviewed and any issues have been addressed, it should be processed and paid according to the payment terms agreed upon with the seller. This may involve making a payment by check, electronic transfer, or other method.

    • Keep accurate records: It's important to keep accurate records of all invoices, including copies of the invoices themselves, as well as any communication or correspondence related to the invoices. This will help to ensure that all transactions are properly accounted for and that any issues can be addressed promptly and efficiently.

Automated Processing of Purchase Order Invoices

The manual processing of invoices is very different and takes a lot more time than with automated systems -- which do most of the work. It will:

    • Pick up invoices automatically and extract from them PO numbers, invoice numbers and dates and amounts using OCR technology.

    • Automatically match the invoice against amounts already paid for the same invoice number.
    br> • Automatically match the invoice against goods and services already received.

    • Using 3-way and 2-way payment thresholds, decide if the invoice is okay to pay or if it requires more research.

    • Using the infomration it finds onm matching purchase orders, it will code the invoice per the information on the PO or decide whether it needs an accounting review.

    • After all the approvals have been paid, and it is okay to pay, it will automatically send the fully coded invoice to the accounting system for payment
Full automation, like that described above, changes AP process into "Management By Exception" processes which are often up to 75% more efficient.

Note: This kind of automation is typically done in Procure to Pay systems, such as those offered by Aestiva which provides purchasing systems as part of its Software Unlimited Plan. Under the plan, all software and modules a customer wants are included.

See Also

Purchase Order Software, Procure To Pay Software, Invoice Authorization Software

Example Usage

"Hi Mary, did the purchase order invoice for ABC Gizmos come in yet?"