Invoice Reconciliation: Meaning and Importance | What does it mean?
What is Invoice Reconciliation?
An invoice reconciliation compares invoices from a supplier with the corresponding purchase orders or contracts to ensure that the quantities, prices, and terms match. This process is essential to catch errors and discrepancies that can result in overcharges or delays in payments.
For example, if an invoice shows a higher quantity of goods than what was ordered, this can be flagged and corrected before the payment is processed. Suppose you ordered 10 gadgets at $100 each with your supplier. However, receiving the invoice shows you were billed for 12 gadgets at $120 each. This discrepancy would need to be reconciled in the bill.
It is also possible to detect and correct invoice prices that differ from contract prices. Invoice reconciliation is a critical part of the accounts payable process and can help to ensure that payments are made correctly and on time.
Billing reconciliation helps ensure you are being billed correctly for the goods and services you have received.
Reconciling your invoices routinely helps to ensure that you are being billed correctly and that there are no errors in your records. It can save you money and help to maintain a good relationship with your suppliers.
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