All you need to know about supplier invoice management
Managing supplier invoices is an important process in any business. For a long time, it was dealt with at a glance, but today it is important to have a constant and precise follow-up of these invoices. This monitoring starts as soon as they are sent and continues right through to final payment. Invoice management should not be confused with invoicing, which is a completely different process.
But how do you manage supplier invoices? How should they be processed and archived? How important is good management?
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How do you manage your supplier invoices?
To avoid a deterioration in the relationship between supplier and company, you need to pay your invoices on time. Here are a few steps for managing and processing supplier invoices.
Retrieving supplier invoices
Invoices are often issued through a number of different channels, resulting in a time-consuming internal search in :
- Your e-mail inbox ;
- Letters
- Customer areas on the supplier’s website.
There are now purchasing management tools for paying supplier invoices, which can also be used to centralise all invoices in one place. Invoice processing can also be automated. As well as being costly, this stage takes an enormous amount of time to complete and can be a source of data entry errors. It is therefore preferable to simplify the tasks of the accounts department for better returns.
Ideally, suppliers should be invited to use the tool and generate electronic invoices themselves.
Validate invoices and pay suppliers
The validation process is generally carried out by the company’s manager. One of the factors that can cause delays in validating supplier payments is the number of invoices the company receives, and poor organisation in processing them. The company will not be able to meet the supplier payment deadline without the signature of the managers.
Once validated, the company has around thirty days from the delivery date to pay its suppliers. In the absence of an agreement between the two parties, the deadline for paying the supplier will be a maximum of 45 days. This can only be exceeded in the case of periodic factors. Penalties may apply if payment terms are not respected.
Archiving documents
All companies are required to keep records of their documents for at least 10 years. This obligation means that they can be produced in the event of a tax audit.
The problem with manual invoice processing
Manual invoice entry is still used by some companies, despite the many risks involved. This can lead to poor management of supplier invoices.
Manual invoice processing leads to :
- loss of mail and relatively long sending times
- illegibility of the document when printed,
- errors when entering accounting data by hand,
- overloading and poor organisation of archives.
On the other hand, the dematerialisation of supplier invoices is booming. More and more companies are switching from paper to electronic format. This change also involves revising the entire validation and payment process. As electronic invoicing becomes compulsory from 1 July 2024, it’s best to adapt as quickly as possible.
E-invoicing eliminates many manual tasks. In return, the benefits are enormous:
- Saving time: the handling process is more optimised and productive. Add to this the fact that invoices are validated more quickly, with as little paper as possible.
- Reduced costs: dematerialisation has an impact on the processing process, which reduces expenditure, saving the company a certain amount compared with the traditional method.
- Greater reliability: the risks of human error, duplication and loss of documents during processing are also reduced.
- Better payment of suppliers: with a supplier payment management solution like Weproc, payment delays due to the large number of invoices to be validated will be reduced, enabling managers to validate supplier invoices more quickly.
With benefits like these, you have everything to gain from digitising your supplier invoices.
Types of dematerialisation
There are several types of dematerialisation: simple digitisation, processing by optical recognition and general dematerialisation.
Simple scanning: this dematerialisation process uses manual processing of invoices. They are then scanned.
Optical recognition processing: OCR (Optical Character Recognition) is an accounting software process that detects information on the document and then transcribes it digitally.
Dematerialisation of the entire process: the entire supplier invoice chain is dematerialised. From purchase to invoice, the entire supplier cycle is taken care of with this type of dematerialisation.
Making a success of electronic supplier invoicing
Use specialised e-invoicing software: there are a number of SRM (Supplier Relationship Management) software packages with prepared processes and templates that companies can simply follow. This will only contribute further to the proper management and processing of electronic supplier invoices.
Enforce standards: each SRM has its own standards. As a company, it’s up to you to check that they are being complied with. This is vitally important because the digital copies to be archived must be compliant and reliable in the event of a dispute.
A few best practices for managing supplier invoices
There are several tips to help you manage your supplier invoices more effectively.
Secure access to invoices
Although dematerialisation is an excellent practice, it is even better when access is properly secured to prevent fraud or piracy. As mentioned above, the ideal solution would be to set up a centralised system that brings together all supplier invoices classified by period. This is made possible by purchasing management software, which provides access to all the information and offers additional security.
Access to supplier invoice files must be configured so that you know exactly who has had access and when.
Take out insurance
A bit like car insurance, invoice insurance provides a way out in the event of non-payment. When customers are unable to pay their bills (or fail to pay on time), they can call on their insurance to cover the remainder. The insurance company will take care of the receivables and can compensate you for up to 90% of the amount, excluding taxes.
Having a dunning service
Unpaid invoices often lead to unprofessional or even offensive e-mails being sent. To avoid this situation, we recommend that you use intermediaries. These are platforms that specialise in collecting unpaid invoices. They are responsible for providing you with qualified staff to manage unpaid invoices.
Once the procedures have been initiated, there is no need for manual reminders. The process is directly automated, so you can save time. What’s more, you’ll avoid undermining the customer-supplier relationship that is so essential to your purchasing process.
Cash flow
There are times when companies themselves are forced to delay payments to their suppliers enormously. This can be caused by late payments from their own customers. As a result, to reduce financial charges, they do not hesitate to extend supplier payment terms. It is therefore preferable to have sufficient cash flow, especially if you are a small or medium-sized business.
File and keep everything
In the event of a tax inspection or audit, the company must be able to provide all the necessary documents from its archives. It is therefore compulsory to keep documents and supplier invoices in case this should happen. Companies that still receive their supplier invoices on paper can also digitise them. All it has to do is comply with certain standards relating to the format of the invoice and the submission of the electronic signature.
Ultimately, opting for purchasing management software is the solution that will facilitate the tasks of the accounting department, cut costs, reduce the problems associated with processing supplier invoices and much more besides. The supplier relationship is fostered with a view to making the purchasing process ever more efficient. All essential information is stored in a single location for easy access and optimum data security.
Want to learn more about our procurement management software Weproc? Contact us or request your free 15-minutes demo below!
Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.