Highlighting the invoice 'budget-breakers'.
Peru's Lizzie Mellor turns the spotlight on potential 'budget-breakers' as a result of inaccurate or unvalidated invoices.
In articles one and two of the series, I discussed the risks to IT and overall business budgets without an effective invoice validation process. Now, let's assume your validation process is optimised and established. This is the opportunity to examine the five major invoice items that can be directly influenced by change in individual, departmental, geographical or age-related circumstances.
- Credit - Significant amounts of credit can be owed by suppliers but never collected. This is mainly because credits are agreed but often not followed-up or invoiced. Through incorrect invoicing, these credits will only emerge after some collaborative IT and Finance Team detective work. Ensure a credit evidence trail (email correspondence and/or credit note) exists with the supplier including the size and purpose of the credit.
- Phone charges - It's common for telecoms supplier invoices to attribute more than one mobile number or handset to a single individual, sometimes even after they have left the organisation. The same applies to Broadband lines, with charges invoiced for sites shut down several years previously. It’s the business’ responsibility to monitor changes in use and inform suppliers, but the suppliers' duty to undertake regular monitoring of products and services they supply and amend invoices accordingly.
- Out of time - Accurate invoice validation offers an easy way to identify the true cost of expensive legacy items – such as licences for ageing applications. This information can be valuable in demonstrating a business case for replacing legacy systems with new equipment. Use validated invoices for budget analysis and business case development.
- Line rental - Often individuals within organisations order additional phone or data lines without knowing the wider supplier contract agreements. This can lead to hundreds of thousands of pounds of unnecessary charges. Create a list of core, contracted services to match against validated invoices. Investigate changes or additions.
- Call monitoring - Although there are stringent laws surrounding employee privacy, employers also have a right to set ‘terms of equipment use’ as part of employment contracts. Invoice Validation can offer a more anonymised method of identifying high-volume overseas or premium charged calls, particularly in global organisations. Validated invoices allow employers to remind employees of their responsibilities in a general way. Even if call or application usage is accurately invoiced, check the legitimacy of usage itself.
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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.