Invoice and delivery note reconciliation: what if automation were the key?
As a business owner, you are well aware that the smooth running and long-term viability of your organization depend on the regularity and conformity of your accounting processes.
One of the most important accounting operations is the reconciliation of invoices and delivery notes. Based on the same principle as bank reconciliation, this task - often complex and time-consuming for your staff - is very important in more ways than one.
What does it involve? How do you reconcile the invoice with the delivery note? Which solution can automate this essential procedure? Answers in this article.
What is invoice/delivery note reconciliation?
What does invoice/delivery note reconciliation involve?
Invoice/delivery note reconciliation is an operation regularly carried out by a company's accounting department. It consists in ensuring that what has been invoiced by a supplier corresponds in every respect to what has been delivered.
It is only after the various items have been checked for conformity that the purchase invoice can be paid, under the conditions negociated conditions (receipt of invoice, 30 days from date of receipt of goods or performance of service, etc.).).
An essential process
The reconciliation of an invoice with the delivery note is a key process for the company, since it serves to guarantee the conformity of operations with the initial purchase order, and thus to trigger payment of the sums due.
In detail, this reconciliation ensures :
- vital information, such as delivery date, details of items ordered and their quantities, unit price and total amount, matches up;
- that the terms of delivery have been respected;
- validity of proof of payment or invoice rejection in the event of discrepancies;
- application of negotiated commercial conditions;
- transaction conformity.
☝️ The process of reconciling invoices with delivery notes is also essential for :
- guarantee the transparency of the company's financial management ;
- optimize cash flow according to payment amounts and deadlines;
- avoid potential disputes with suppliers.
The components of invoice/delivery note reconciliation
As a reminder, a delivery note (BL) is a commercial document issued by the supplier when the recipient takes delivery of the goods. This document lists all the products delivered (name, reference), the quantity of each reference and the packaging. The delivery note also includes the supplier's and recipient's contact details.
The invoice is a commercial, accounting and tax document. It constitutes legal proof, and is issued by the seller after delivery of an order.
In the same way as the BL, the invoice details the products delivered or services rendered, as well as the amount of each reference, to establish the total amount exclusive of tax, VAT if applicable, and the amount inclusive of tax.
Finally, let's move on to the purchase order (PO). This is not mandatory, but recommended. It can be a document in its own right, generated from the accepted quotation, or the quotation itself, signed and marked "bon pour accord".
💡 To sum up, the purchase order must correspond to the delivery note, which in turn must correspond to the invoice. These accounting vouchers should be archived and kept for 6 years, in dematerialized form.
How do I reconcile an invoice with a delivery note? The 6 steps
The procedure for reconciling a purchase invoice with the corresponding delivery note involves 6 steps.
Let's take a look at them. 👉
- Collection. Gather BLs on one side and invoices on the other, classifying them according to your organization and the volume of parts per supplier.
- Checking. Check documents for essential information, such as :
- name and contact details of supplier and recipient ;
- order number ;
- date and place of delivery;
- details of goods delivered and quantity;
- the recipient's signature on the BL, confirming receipt;
- unit price and total amount.
- Comparison and reconciliation. Carefully compare the correspondence between invoices and BLs.
- Notifications. Note any reconciliation discrepancies (quantity, reference, etc.) and any anomalies.
- Corrective actions. In the event of discrepancies, contact the internal departments to which the delivery is addressed, and the supplier, in order to obtain the necessary explanations and any necessary adjustments.
- Validation. If the parts match perfectly, the reconciliation is validated and the invoice is accepted for payment. If not, the invoice is rejected and returned to the supplier, who must then produce a new invoice in line with the commitments made.
What are the limits of manual reconciliation?
Manual reconciliation of the invoice with the delivery note entails risks likely to have a major impact on the company's accounting and financial management.
Common risks include
- human error: an employee may fail to identify a reconciliation discrepancy, or make an error in part number, quantity, reference number, amount, etc. when entering documents;
- fraud: with manual reconciliation, the difficulty of identifying internal or external fraud increases;
- lack of traceability in the manual reconciliation process;
- reduced efficiency when the volume of invoices and BLs to be reconciled is high... and lead times shortened ;
- delays in processing operations, and therefore in payments, which weaken cash flow, cause a deterioration in relations with suppliers, and worsen working conditions for the accounting team.
Why automate the reconciliation of invoices with delivery notes?
In view of the risks that manual reconciliation of invoices and delivery notes poses to the smooth running of your business, we recommend that you automate this operation as far as possible.
More concretely, here are the advantages promised by automated reconciliation:
- time savingsand improved productivity ;
- fewer errors;
- rapid, automatic detection of reconciliation anomalies and discrepancies;
- optimization of the process, with dematerialization of sales and accounting documents throughout;
- a smoother relationship between your suppliers and your company's internal departments.
🍒 The icing on the cake is the automated reconciliation of the invoice with the delivery note, using digital tools and artificial intelligence to enhance the security of your operations. In fact, thanks to the resulting traceability, you gain greater visibility for optimal cash management.
Which tools can support you?
Automating the process of reconciling the purchase invoice with the delivery note is carried out using specific software, in particular dematerialized invoicing solutions.
These applications integrate auto-match functions, based on character recognition algorithms (OCR) which :
- decipher dematerialized documents ;
- recognize the key information to be used for reconciliation;
- compare the data set.
When the documents match, the reconciliation is validated and the invoice approved for payment.
🛠️ Software example:
Compleo Invoice Platform is an online e-invoicing solution developed to meet the needs of SMEs, ETIs and large corporations. By automating your document reconciliation operations, it saves you considerable time in your accounting processing. Compleo Invoice Platform also optimizes your validation processes (by setting up customized workflows) , and connects seamlessly to all ERP and accounting tools.
Invoice and delivery note reconciliation in brief
The dematerialization of business processes and the integration of artificial intelligence into management tools facilitate and secure the execution of laborious and often repetitive tasks.
Such is the case for reconciling invoices with delivery notes.
This complex, time-consuming procedure, which entails numerous risks when carried out manually, becomes easy, fast and reliable thanks to automation.
By using state-of-the-art tools, your accounting teams can delegate these operations and concentrate on higher value-added tasks.
What's more, automation gives you near real-time visibility of the status of your invoices and payments, enabling better cash management and more informed financial decision-making.
Article translated from French