Invoice and delivery note reconciliation: what if automation was the key?
As a business owner, you are well aware that the smooth running and long-term survival of your organisation depend on the regularity and conformity of your accounting processes.
One of the key accounting operations is the reconciliation of the invoice and the delivery note. Based on the same principle as bank reconciliation, this task, which is often complex and time-consuming for your staff, is very important in more ways than one.
What does it involve? How do you reconcile the invoice with the delivery note? What solution can you use to automate this essential procedure? Find the answers in this article.
What is invoice/delivery note reconciliation?
What does reconciling the invoice with the delivery note involve?
Reconciling the invoice with the delivery note is an operation carried out regularly by a company's accounting department. It involves ensuring that what has been invoiced by a supplier corresponds in every respect to what has been delivered.
It is only after the various items have been checked for conformity that the purchase invoice can be paid, under the conditions laid down (on receipt of invoice).(on receipt of invoice, 30 days from the date of receipt of the goods or performance of the service, etc.).).
An essential process
The reconciliation of an invoice with the delivery note is a key process for the company, since it serves to guarantee that the operations comply with the initial purchase order, and therefore triggers payment of the sums due.
In detail, this reconciliation ensures that :
- vital information, such as the delivery date, details of the items ordered and their quantities, the unit price and the total amount, matches up;
- the terms of delivery have been respected;
- the validity of the proof of payment or invoice rejection in the event of discrepancies;
- application of the commercial terms negotiated;
- the conformity of the transaction.
☝️ The process of reconciling invoices with delivery notes is also essential for :
- guarantee the transparency of the company's financial management ;
- optimise cash flow according to payment amounts and timescales;
- avoid potential disputes with suppliers.
The components of invoice/delivery note reconciliation
A delivery note is a commercial document issued by the supplier when the recipient takes delivery of the goods. This document lists all the products delivered (name, reference), the quantity of each reference and the packaging. The delivery note also includes the supplier's and recipient's contact details.
The invoice is a commercial, accounting and tax document. It constitutes legal proof, and is issued by the seller after an order has been delivered.
In the same way as the purchase order, the invoice lists the details of the products delivered or services rendered and the amount of each reference, to establish the total amount excluding tax, VAT if applicable and the amount including tax.
Finally, let's move on to the purchase order (PO). This is not compulsory, but it is recommended. It can be a document in its own right, generated from the accepted quotation, or the quotation itself, signed and bearing the words "bon pour accord" ("good for agreement").
💡 To sum up, the purchase order must correspond to the delivery note, which in turn must correspond to the invoice. These accounting vouchers should be archived and kept in electronic form for 6 years.
How do you reconcile an invoice with a delivery note? The 6 steps
The procedure for reconciling a purchase invoice with the corresponding delivery note involves 6 steps.
Let's take a look at them. 👉
- Collection. Gather the delivery notes on one side and the invoices on the other, classifying them according to your organisation and the volume of items per supplier.
- Check. Check the documents for essential information, such as :
- the name and contact details of the supplier and recipient ;
- the order number
- the date and place of delivery
- details of the goods delivered and their quantity;
- the recipient's signature on the delivery note, confirming receipt;
- unit price and total amount.
- Comparison/reconciliation. Carefully compare the correspondences between the invoices and the delivery notes.
- Notifications. Make a note of any reconciliation discrepancies (quantity, reference, etc.) and any anomalies.
- Corrective action. In the event of a discrepancy, contact the internal departments to which the delivery was made and the supplier to obtain the necessary explanations and any adjustments.
- Validation. If the documents match perfectly, the reconciliation is validated and the invoice is accepted for payment. If not, the invoice is rejected and returned to the supplier, who is then required to produce a new invoice in line with the commitments made.
What are the limits of manual reconciliation?
Reconciling the invoice with the delivery note, which is done manually, entails risks likely to have a major impact on the company's accounting and financial management.
Common risks include
- human error: the employee may fail to identify a reconciliation discrepancy or make an error in the part number, quantities, references, amount, etc. when entering the documents;
- fraud: with manual reconciliation, the difficulty of identifying internal or external fraud increases;
- lack of traceability in the manual reconciliation process;
- reduced efficiency when the volume of invoices and BLs to be reconciled is large... and lead times shortened;
- delays in processing transactions, and therefore in payments, which weaken the cash flow balance, lead to a deterioration in relations with suppliers and worsen the working conditions of the accounting team.
Why automate the reconciliation of invoices with delivery notes?
In view of the risks that manual reconciliation of invoices and delivery notes poses to the smooth running of your business, we recommend that you automate this operation as far as possible.
More specifically, here are the advantages promised by automated reconciliation:
- time savingsand improved productivity ;
- fewer errors
- rapid, automatic detection of reconciliation anomalies and discrepancies;
- optimisation of the process, with the dematerialisation of commercial and accounting documents throughout;
- smoother relations between your suppliers and your company's internal departments.
🍒 The icing on the cake is that the automated reconciliation of the invoice with the delivery note, using digital tools and artificial intelligence, enhances the security of your operations. The resulting traceability gives you greater visibility, so you can manage your cash flow more effectively.
What tools are available to support you?
The process of reconciling the purchase invoice with the delivery note is automated using specific software, in particular paperless invoicing solutions.
These applications incorporate auto-match functions based on character recognition algorithms (OCR) that :
- decipher dematerialised documents ;
- recognise the key information to be used for reconciliation; and
- compare all the data.
When the documents match, the reconciliation is validated and the invoice approved for payment.
🛠️ Software example:
Compleo Invoice Platform is an online electronic invoice solution developed to meet the needs of SMEs, ETIs and large groups. By automating your document reconciliation operations, it saves you considerable time in your accounting processing. Compleo Invoice Platform also optimises your validation processes (by setting up customised workflows) , and can be connected to all your ERP and accounting tools, for greater fluidity.
Compleo Invoice Platform
Invoice and delivery note reconciliation in brief
The dematerialisation of business processes and the integration of artificial intelligence into management tools make laborious and often repetitive tasks easier and safer to perform.
This is the case for reconciling invoices with delivery notes.
This complex, time-consuming procedure, which entails a number of risks when carried out manually, is made easier, faster and more reliable by automation.
By using state-of-the-art tools, your accounting teams can delegate these operations and concentrate on higher added-value tasks.
What's more, automation gives you near real-time visibility of the status of your invoices and payments, enabling you to manage your cash flow more effectively and make more informed financial decisions.
Article translated from French