Creative Invoice Ideas for Accounting that Streamline Your Workflow

Invoice ideas for Accounting

hello everyone welcome back to another video in today's video we're going to talk about invoice processing process so if you have a interview schedule in invoice processing process this video is going to help you a lot so without any further Ado let's get started so what are the topics we are going to cover in today's video first of all we will start with what is invoice processing then we will move to what is invoice after that what are the key details which invoice contains after that we will see types of invoices and then we will see what are the various stages of invoice processing process and lastly we are going to see what are the common challenges that we face in a invoice processing process let's start with what is invoice processing process so it is kind of a process which starts from receiving the invoice and ends at the payment of the invoice so you can think of invoice processing as a journey an invoice takes from arriving at your doorstep to getting paid it involves various activities like verification getting approvals making payments and keeping records so together all these activities are combined known as invoice processing you need to remember it is very crucial for smooth cash flow happy vendors and accurate accounting that your invoice processing process is efficient and effective moving ahead now let's talk about what is a invoice so invoice is a document which tells a company how much much they owe someone for the services or the goods they have received from them so it is nothing but a commercial document which lets you know that you need to pay someone something for the services or Goods that you have received from them okay moving ahead now let's talk about what are some of the key details you will find on an invoice so invoice contains various information which can be divided into three major categories which are Sellers and buy buyer related information invoice related information and lastly product or service details so we are going to look at each of these categories one by one so let's start with our category number one which is Sellers and buyer information so what kind of seller information you will find on an invoice it is typically include company's name address and contact information of the business sending the invoice similarly what kind of buyer information the invoice will include it will include company name address and the contact information of the business receiving the invoice here you need to remember there can be two addresses of buyer one is shipping address and one is billing address so the shipping address would be the address where the seller need to send the goods and the billing address would be the address where the seller would build the invoice to get the payment moving ahead our second category was invoice related details so what kind of invoice related details we will find like invoice number invoice date payment due date and purchase order number so purchase order number you will find on invoice only then when it is a PO based invoice so what is a poas invoice what is a nonp based invoice we are going to cover those topics as well in this video in the later part moving ahead now let's talk about the third category which is product or Services details so what kind of product or Services detail we will find description of the goods what kind of product or Services we are going to receive quantity the number of units for each product or Services provided unit price of goods or services we are going to receive total price of the goods and services we have received how we can get it by multiplying the quantity with the unit price and then we can also get the subtotals taxes information and discount related information on our invoice moving ahead now let's talk about some of the additional details which we can also find on an invoice but you need to remember these might or might not be available on an invoice but yes there can be scenarios where you will find these information so what are these informations first one is payment terms so information related to acceptable payment methods can be also available on the invoice so if there is mentioned pay via check only pay online only so you need to make sure that you are paying for that bill as per the instructions of of the invoice again what are some of the additional information we can find on an invoice that is any additional notes such as delivery details or warranty information can be also mentioned on the invoice okay great now let's move on and talk about what are the various types of invoice so the first one is po based invoice so what is a PO based invoice these are the invoices against which we have a PO available which makes the verification process very easy because we can compare the PO against the invoice which we have received other type of invoice is nonp based invoice these are the invoices against which we don't have a PO available and this makes the process of verification very hard because you don't have a PO so you can't compare the information of the invoice against any document so it makes the process very difficult and need more scrutiny compared to a poas invoice generally we use poas invoice for the goods or services where we can quantify our uses of product or service but on the other hand we use nonp based invoices in such cases where we cannot assertain how much the service we are going to use for example water bill or electricity bill you cannot predict exactly how much units you going to consume during the month that's why in such type of cases we use nonp based invoices and on the other hand in all other cases we use generally po based invoices moving ahead now let's talk about what are some of the key stages of invoice processing so the very first stage of invoice processing process is receiving the invoice once you receive the invoice your invoice processing process start and what are the various modes in which you can receive the invoice you can receive it via email or your local mail or even through a online portal so these are some of the ways by which you can receive your invoice and your invoice processing process will start once you are done with your stage number one we will move to our stage number two which is going to be verification so in this process what you are going to do you are going to match the invoice to a PO if PO is available that is if it is a PO invoice so you can call this process as two-way matching as well because what we do in two-way matching We compare the details of purchase order against the invoice which we have received again if you're are comparing this invoice against the PO and good receipt note then you can call it as three-way matching which means you are comparing your three different sources to identify or to verify it also in this stage you need to identify vendor information and all the contact details which are mentioned on the invoice you need to check product or service description and the quantities mentioned on the invoice Additionally you need to scrutinize the price and the calculations of the invoice and lastly you are going to check the tax rates and all the relevant compliances once you are done with your verification step you can move to your third step which is going to be approval workflow so what is approval workflow it is nothing but the process of getting approval of invoice before making payment for that invoice so depending upon the amount and complexity different people might need to approve the invoice so what kind of people they may be so it could be a department head or a manager which verifies the goods or services received or it could be a finance manager who checks the accuracy and adherence to the budget and lastly if the amount is very huge it can go for approval from a CEO or CFO as well once you are done with your approval workflow process you can move to your fourth step which is going to be Payment Processing so what is Payment Processing so once your invoice is approved it is time to pay it off so popular method of payment include but are not limited to AC transfer which is electronic secure and faster then we have option of paying through checks which is a very traditional method slower and also prone to errors and lastly we can also pay through credit cards which is convenient but yes generally you will see electronic mode of transfer is very popular in top companies once you are done with your payment processing the last step of your invoice processing process would be archiving and Reporting so what do you mean by archiving and Reporting it is nothing but storing the invoice we have paid securely for audit and references so in the future if auditor or Senior Management ask us for the backup of any payment we can provide them the support that's why we do archiving and Report so few bonus STP related to invoice processing process moving ahead now let's talk about what are some of the common challenges we might face in an invoice processing process so there are so many challenges we can face in an invoice processing process but in this video we are going to discuss these major three challenges which we might face during our invoice processing process so the very first one is approval delays so earlier in this video we have seen that we need to get approval from various people for processing the payment for an invoice so there can be cases where we are not getting the approval on time from the Senior Management which can cause delay in the payment process which is a challenge of invoice processing then the second most challenging situation can be missing information so if the invoice which we have received have incomplete information it can cause a headache because you cannot process the invoice until you have all the required information as per your process so if you are receiving any invoice where some information is missing then it will stay in open queue until you have all the required information which is a major challenge in invoice processing and lastly we can face issue related to data entry error so accuracy is the key for successful invoice processing process companies majure first pass yield invoices where we don't have any kind of typo errors or any different errors which can cause the delay of invoice process so these are the three major categories of challenges which we might face in our invoice processing process moving ahead now let's talk about some of the best practices which we can use for efficient invoice processing process so the very first one would be automation tools so we need to embrace our automation tools which can speed up our invoice processing process and reduce the errors also what we can do we can establish effective communication channels so the communication is the key to success companies need to form proper communication Channel within organization and with their suppliers or vendor so that if they find any discrepancy in the verification process they can communicate effectively and try to resolve the issue as soon as possible so that invoice don't get stuck in the invoice processing process and lastly regular audits can also help in identifying and rectifying any discrepancies with the help of audit we can identify the Improvement areas in our process and strive process excellence because you need to remember a smooth process means happy vendors because they are getting the invoice payment on time accurate financials because if you are paying someone on time it will reflect the true and Fair View of your financials and also if you have a good process in place it will give you more time which you can use to focus on the things which matter the most if you want to learn about P2P cycle you can watch this video next this will help you understand the entire P2P cycle