Thoughtful outcomes through experience

Avoiding a nervous breakdown over invoicing

Peru's Lizzie Mellor offers advice on spotting invoice inaccuracies and what breakdown data to expect from suppliers.

In my first post on invoice validation, I discussed the budget damage that can be caused if IT supplier invoices can't be accurately validated. But how do you spot inaccuracies in the first place and what data is needed from suppliers to ensure effective validation?


The basic ground rules of invoice submission are clear. Clients should expect suppliers to provide a clearly laid-out invoice with line-by-line itemisation and the rate – the total of which should equal the invoiced amount.

Added to that should be supporting breakdown, or backing, data showing relevant information such as time spent, allocated landline or mobile numbers, application types and licences and any changes to rate cards since the previous invoice, with an up-to-date card also supplied.

All of this should be a contractual – and therefore legal – obligation upon the supplier. If it isn’t, consider re-negotiating the original contract.

However, suppliers also have the right to expect clients to check their invoices and challenge any perceived inaccuracies in a timely fashion.  That said, Peru's Invoice Validation Service. has identified supplier overcharging as much as three years after invoicing leading to more than £100,000 in reimbursements.

The big five

Invoice Validation can be complicated, but five basic indicators should immediately raise questions about invoice accuracy before validation or payment is made:

  1. The Lump - The supplier sends an invoice with only one number as a value for the overall bill. There is no breakdown of how this number was calculated.
  2. Misalignment - The amount on the invoice does not align with the breakdown data. 
  3. Mismatching - The breakdown data itself doesn’t provide individual cross-matching with line items. 
  4. Unrated - The rate descriptions on the invoice do not match those on the rate card held by the client. 
  5. Unclear - The rates on the rate card are not clearly defined.  

The solutions are generally fairly straightforward:

  • Request full, line-itemised breakdown data from the supplier before validating any invoice
  • Expect a detailed, updated rate card to be supplied as and when new rates are introduced
  • Do not accept vague, generic descriptions on rate cards.

Read the full article here

Lizzie Mellor joined Peru Consulting as a Commercial Analyst before being rapidly promoted to Consultant, working with a number of clients. Specialising in analytics and data modelling she had previously worked in commercial roles focused on sourcing and finance.

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