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By incorporating an electronic invoice processing system with strategic invoice verification processes, an
organization can significantly reduce the cost to process transactions and eliminate man hours currently
dedicated to invoice dispute and resolution.
• Merchant identifier
• Date of transaction
• Transaction amount
Additionally, your company may require more detailed information be itemized prior to
releasing payment. Some of these data points may include:
Invoices that do not meet the customer’s basic data requirements should be rejected prior
to invoice submission. By automating this process, the administrative costs associated with
manual exception management is significantly decreased.
Valid. Once it is confirmed that all required data fields have been completed, the next level of
invoice verification requires that information provided be valid. For example:
Accurate. If valid data has been submitted for all of the required invoice fields, the system
should then check for accuracy. Some examples of standard formulas that must be approved
are:
• price x quantity = subtotal
• percentage sales tax x subtotal = sales tax charged
• subtotal + sales tax = total
1
http://www.unece.org/press/pr2007/07trade_p02e.htm
Administrative Cost Savings through Invoice Verification 1
2
Gartner industry estimate. 2003. http://www.gartner.com/press_releases/pr24june2003e.html
2010 www.msprivatelabel.com
Bill duplicate filters. Various industry estimates suggest that the vast majority of costs
associated with processing a transaction are accrued in labor. Filtering processes reduce the
number of duplicate invoices submitted to an accounts payable department, thus minimizing
the administrative workload of employees in an accounts payable department. In one study,
87 percent of organizations noted increased efficiency in posting and reconciliation processes
through electronic payment and accounting systems. Likewise, 76 percent indicated cost
savings and administrative staff reductions as a key benefit to adopting an electronic payment
system with their accounting system.3
Invoice filtering cross-references various pieces of invoice data with previously submitted
invoices. Comparing transaction values to detect similarities in this way helps identify invoices
that are likely to have been previously processed. Data analyzed within bill duplicate filters
include, for example:
• Delivery location
• Delivery date
• Total amount
• Merchant number
Each filter includes a combination of select data points. Additional filters are then layered
in to maximize effectiveness. For example, one filter may include delivery location, delivery
date and total amount. A second filter may include delivery date, merchant identifier and card
number. By layering these filters, the number of false positive duplicates is reduced while the
likelihood of identifying true duplicates is improved.
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Product-price verifications. The processes to determine that the price charged for a
product is appropriate for the product purchased are numerous, and it is at this point in rule
development that verification procedures can become extremely complex. We break product-
price verification processes into three categories:
The system should track both high and low tolerances to ensure that settlement is not
conducted on an erroneous transaction that will later be corrected or reprocessed.
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