Review supplier invoices
Supplier invoices shall be validated in the following respects.
1) ADMINISTRATIVE CHECKS -- Is the invoice properly administered?
a) The first check is to see if the invoice is issued in compliance
with the contract terms. Since contract terms will vary, the reviewer
must consult the supplier contract. Invoicing terms may also be
summarized in the task order properties viewable in Project360. Take
care to note the difference between invoicing terms and payment terms.
Task orders should specify both.
b) Common examples of administrative errors include the following.
i) Invoice issued not at the correct time interval (weekly invoice
instead of monthly, for example).
ii) Invoice issued on the wrong event trigger (invoice on delivery
instead of acceptance, for example).
iii) Invoice expressed with the wrong units (invoice for square
miles instead of tiles, for example).
iv) Invoice referencing the wrong project number.
c) Remember that what may be right for one supplier may not be right
for another. The guiding document is the supplier’s task order.
d) Minor irregularities, if they can be remedied, may be waived by
the invoice reviewer. Examples of minor irregularities may include the
following.
i) Invoice addressed to the wrong person within the correct
company.
ii) Spelling errors.
e) If the invoice does not pass the first check, then stop the
invoice review and return to the supplier for correction. Otherwise,
proceed to step 2).
2) QUANTIFICATION CHECKS -- Is the invoice properly quantified?
a) The second check is to see if the invoice is issued for the right
amount. Since contract terms will vary, the review must consult the
supplier contract to understand the correct amount. A task order value
schedule may also be consulted in the Project360 database.
b) ACCUMULATIONS -- Take care with the handling of accumulated
reporting in an invoice. A supplier may issue a fresh invoice for each
service as a separate trail, or may list the accumulated progress with
deductions for “previously invoiced amounts.” Both approaches can be
valid. It is up to the reviewer to keep track of “previously invoiced
amounts” to ensure accumulated tracking is accurate in the invoice. An
invoice should not be approved if it repeats a value already invoiced.
If a supplier wants to remind the company of an amount already due, such
a reminder should be expressed as a “Billing Statement” not a repeated
invoice.
c) ACCEPTANCE TRIGGERS -- Take care to note whether the invoice
amount is valid with regard to the status of product delivered or
accepted. Some contract terms are very specific about what constitutes
acceptance of product. In some cases, the definition of acceptance is
determined by a third party or the end customer.
d) CASH FLOW TRIGGERS – Take care to note whether the invoice amount
is valid with regard to possible cash-flow triggers. Some contract terms
specify that a supplier may invoice upon notification of payment
received from our customer, for example.
e) PROJECT BUDGET – The reviewer should consult the project budget in
Project360 to verify that this supplier expense was anticipated in the
project plan. The total accumulated invoicing from the supplier should
not exceed the budgeted amount for that supplier for that project.
f) EXEMPTIONS FOR INTERNAL INVOICES – Internal invoices may be
received and validated for work in progress, even if the internal
purchase order does not explicitly grant this option. For
work-in-progress invoices, all aspects of the quantification check still
need to be verified. The only exemption is with regard to the possible
delivery/acceptance triggers.
g) If the invoice does not pass the second check, then stop the
invoice review and return to the supplier for correction.
3) PAYABLE STATUS -- Is the invoice payable?
a) The third check is to validate whether the invoice is payable now
or later. If later, then when? Since contract terms will vary, the
reviewer must consult the supplier contract to understand payment terms.
Note that payment terms are different from invoicing terms. Payment
terms may also be captured in the task order properties in the
Project360 database.
b) Be sure to document on the hard-copy invoice (for external
invoices) the date when the invoice is payable. If it is payable now,
write today’s date.
c) EXEMPTIONS FOR INTERNAL INVOICES -- For internal invoices, this
consideration is irrelevant, since intercompany payments will be
dictated by more general negotiations.
Linked Resources
 |
Name |
Description |
Type |
 |
Project360
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Project360 database in SQL server
|
Database |
Owner
|
Name |
Description |
Type |
 |
COO
|
Cheif Operations Officer
|
Role |
Performed By
|
Name |
Description |
Type |
|
PM
|
Project Manager
|
Role |
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PSO
|
Project Support Officer
|
Role |
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