Matching invoices and paying vendors does not need to be this stressful
The best practice in the construction industry to pay supplier invoices is to use a “three-way match” system. However, there are still re-occurring issues when it comes time to pay invoices. In the perfect scenario, when the supplier invoice (INV) quantity and price match the purchase order (PO) quantity and price, which in turn matches the goods receipt (GR) quantity, the payment is processed.
Yet, we all know there can be underlying issues when it comes to processing invoices, leading to many hours of research, investigation, phone calls, emails and frustration trying to confirm or reject the invoiced quantities.
A typical three-way match verification is depicted in a straightforward illustration below:
INV Quantity and Price = PO Quantity and Price = GR Quantity
Two-way and three-way match for processing invoices
Complexities can arise during this process when multiple invoices are submitted by a vendor, or multiple deliveries or partial shipments are present for the same line item. The process is further complicated when materials have multiple delivery destinations, like a remote construction site, offsite lay-down or a warehouse.
How many times have you, the responsible manager, been contacted by accounting or expediting to confirm if goods were received or not? How long did it take you to check with the warehouse, construction laydown yard or job site only to find out there was a shortage, damage, the delivery was rejected or not yet arrived? From experience, we know this can be hours, days or even weeks before we get an answer.
Utilizing SiteSense® on your construction project allows you to have Total Project Visibility® at your fingertips. By implementing SiteSense®, your Good Receipts (GR) can be processed in the field or warehouse using a ruggedized tablet or web-enabled smartphone. Photos of the item and shipping documents are uploaded to the electronic GR from the field. Any discrepancy with the shipment, whether it be a material shortage, damage or even a non-conformance issue are flagged in the system at the time of receipt. Using SiteSense® integration adapters, Goods Receipt information can be automatically synchronized to a Purchase Order or ERP software system. This further reduces data entry errors and eliminates the need to wait for paper documents to be processed.
When an issue arises with an invoice, the Accounting Department can use SiteSense® to search for the Purchase Order number, delivery date, packing slip, or even Bill of Lading number to confirm the quantity delivered and view the vendor’s shipping documents for visual verification. All without the need to visit the project site or contact the Receiving Department to dig through boxes of paper.
Implementing a robust process and goods receiving procedure coupled with the right technology reduces wasted labor hours and ensures timely vendor payments. This not only delivers noticeable cost benefits to your organization but ultimately improves your bottom line. Why not get started on streamlining your Accounts Payable processes with SiteSense® today? Contact us to find out how.