You are busy running your business or non-profit. Invoices and credit card bills arrive. Your bookkeeper pays them. Should you pay more attention to those invoices than just signing the checks?
You work hard for your income or donations. It’s important that your organization only pays for the goods and services it receives, at the agreed-upon price. Avoid costly invoice payment mistakes by putting these three steps in place:
1. Verify that the invoiced goods or services were received
Establish a process to ensure that ordered items were received and that services were provided. The process should include receiving documentation that can be matched with the invoice. The matching and verification process should be done before the invoice is paid.
2. Check invoice prices against the contract or purchase order
Spot-check invoice prices with the signed contract or other document that reflects the agreed upon price. Every line item does not need attention – focus on larger items and a few of the smaller ones. Take more time with new suppliers and service providers sothey know you are paying attention.
3. Ensure that each invoice is only paid once
Avoid paying invoices more than once with invoice tracking processes. Log invoices electronically or manually, including the date, when received. Cancel or mark vendor invoices when payment is made. Maintain unpaid electronic or manual invoices separately from paid invoices to avoid confusion.
Even small businesses and non-profits with just a few employees or volunteers can implement these three steps at little or no additional cost. Attention to this part of your business or non-profit not only reduces costly mistakes; it also sends a strong signal to all stakeholders that you are monitoring your organization’s payment activities.