Purchase order software development services

Matching levels

Setting tolerances

Invoices rarely match orders to the penny: rounding, small delivery charges and price adjustments are common. Tolerances define how much difference is acceptable without a query, such as a small amount or a small percentage per line. Within tolerance, the invoice proceeds; outside it, the invoice is held and routed to someone to resolve. Agree tolerances with finance, and review them once you see how often they are triggered.

Tolerances that are too tight create work; too loose, and overcharges slip through.

Common discrepancies

• Price difference

  Invoice price higher than the agreed order price.

• Quantity difference

  Invoiced for more than was received.

• No matching order

  Invoice quotes no PO or the wrong one.

• Duplicate invoice

  The same invoice received twice.

From invoice to accounting

1. 01

   Capture

   Invoice received by email or upload; key details read.

   Output: Invoice record

2. 02

   Match

   Linked to PO and receipt; differences checked.

   Output: Match result

3. 03

   Resolve

   Discrepancies queried with supplier or requester.

   Output: Agreed invoice

4. 04

   Code

   Account and cost codes taken from the PO.

   Output: Coded invoice

5. 05

   Post

   Passed to accounting for payment.

   Output: Ready to pay

Capturing invoice details

Guarding against payment fraud

A common fraud involves invoices or emails claiming a supplier's bank details have changed. Purchase order software can flag any invoice where bank details differ from the supplier record, and require changes to supplier bank details to be verified through a separate, known contact before they are accepted. Keeping this check in the process, rather than relying on individual vigilance, reduces risk.

Passing invoices to accounting

Once matched and coded, invoices can be passed to accounting software through its integration options, avoiding re-typing. Agree which system is the record for suppliers and payments, and how credit notes and part-payments are handled, so both systems stay in step.

Credit notes and returns

When goods are returned or a price is corrected, suppliers issue credit notes. These should be matched to the original order and invoice, so the order shows the true cost and accounting reflects the reduction. Tracking expected credit notes, such as after a return, lets finance chase suppliers who have not issued them. Without this, credits are easily forgotten, and the business pays more than it should.

Credit notes received without a clear reference should be queried rather than guessed.

Resolving queries with suppliers

When an invoice is held, the supplier needs a clear explanation: which line differs, by how much and what is expected. Recording queries and responses against the invoice keeps the history in one place and avoids repeated emails. A list of invoices on hold, with their age, helps finance prioritise and maintain good supplier relationships by not delaying payment unnecessarily.

Services and recurring costs

For services, a requester confirms work was delivered instead of a goods receipt. Recurring costs, such as subscriptions, can be handled through annual orders with regular invoices matched against them.

Paying on time

Matching invoices quickly helps pay suppliers on agreed terms, which supports good relationships and avoids late payment issues.

Invoices without orders

Some invoices will never have a PO, such as utilities. Agree which categories are exempt and route them to budget holders for approval, so they do not clog the matching queue.