By Mary Schaeffer
One would think that any vendor would make sure it included all the information a customer would need to pay the invoice as quickly as possible. But, one little question to readers of our ezine revealed this was absolutely not the case. Vendors routinely leave off:
- The name of the person to contract information if there is a question about the invoice
- Contact information (email and phone number) of the vendor’s contact person
- The name of the entity to make checks payable to
- Purchase order numbers (and/or name of requisitioners)
- Sales tax separated out from total cost
- The Remit-to address
Leaving this information can make it difficult to process invoices, as time has to be spent searching for or requesting missing data. Finding an efficient way to address this problem, will make your invoice handling process more efficient. Here are a few steps that will help you with that process.
Set the stage so that the vendor knows what is required. Spell out what you need in your vendor welcome packet or letter. Make sure you delineate all the information that should be included on an invoice. Make it clear that leaving any of this information off the invoice will result in a delay in payment.
Reinforce this message whenever you receive an invoice missing key information that makes it impossible to pay from the information included on the invoice. Return the invoice with a very polite letter informing the vendor that in order to pay them in a timely manner, the invoice must contain _______. Of course, you’ll fill in the blank with whatever the missing piece of required information is. Create these standard letters and make them available to all your processors. They can simply change the addressee in the letters making this a very simple task.
Take more drastic action, if they don’t change their ways. The hope is that when a vendor receives a letter saying its invoice is missing a piece of information, they will go back and address the problem and change all future invoices. But this does not always happen. Some will continue to send invoices with the information wasting your staff’s time when they have to return these invoices, over and over again. When this happens pick up the phone and have a chat with the vendor. It is in both parties best interest that they improve their invoicing practices.
A Better Approach
As you can see, the steps mentioned above all require additional resources, something few accounts payable departments have. By utilizing invoice automation, the problem is avoided. The vendor will be prompted to enter the needed information, neatly eliminating the problem and saving valuable resource time.
Mary S. Schaeffer, a nationally recognized accounts payable expert, is the founder of AP Now, a company that creates business intelligence on all issues impacting the accounts payable and payment function. She is the host of the AP Now Podcast.