One of the most frustrating and easily fixed issues with the Accounts Payable (AP) department is tracking down missing invoices. Missing invoices are those invoices that come to light when a vendor calls AP asking for payment status and when AP investigates, they find that the invoice in question was never posted to the AP system. This is not only is a waste of the AP department’s time but it can also cause duplicate invoices to get paid. Here are some ideas to help your AP department to reduce the percentage of missing invoice handling.

Determine the source of the problem. More than likely not all vendors are having the missing invoice problem, so narrow the search down to the vendors having the issue. Then investigate why invoices from the vendor are not making it to AP. This could be many reasons but a common one is products or services not going through the correct order process. If you have a centralized purchasing department, all ordering should go through this department so invoices are paid in a timely manner and costs controlled. If purchasing is bypassed and invoices are sent directly to the person ordering, it can lead to invoices rejected, lost invoices and thus missing invoices.

Create a new policy. Once the problem is uncovered, talk to the managers of AP and purchasing. Get there feedback and then provide a solution. Any easy fix to keep purchasing in the loop is to require purchase order numbers on all orders. The purchase order numbers are assigned by purchasing so they can track all expenses and control costs. Also, if AP receives an invoice from a vendor without a purchase order number it should be rejected.

Communicate the policy. Make sure the new policy is communicated to all departments and all vendors. That way, everyone will understand the new expectations and avoid any finger-pointing.

Establish new in-box for vendors. In addition to implementing a purchase-order policy, it is helpful to have vendors submit invoices and backup in an electronic format (e-invoice) to one centralized AP email. The centralized email distributes the e-invoices to multiple recipients in the AP department, which helps ensure that nothing is missed. This is also much more efficient than the old standard paper invoice which has to be scanned and stored electronically anyway.

Here are 8 best practices for invoice processing from IOFM’s Complete Guide to AP Best Practices:

  1. Have all invoices sent to AP first
  2. Insist the invoices be addressed to AP
  3. Add a generic e-mail address for invoices
  4. Insist on buyer’s name or PO# on the invoice
  5. Require the vendors include their vendor number on invoice
  6. Date and time stamp invoices upon receipt
  7. Set up a tracking system
  8. Requiring a PO number to be included on the invoice helps separate invoices that need approval from those that do not—and also saves time when matching up invoices to purchase orders