Invoices associated with materials that are shipped are generally easy to automate. If the goods that arrive match the purchase order, then you pay the invoice. But invoices associated with contracted services are a little more complex. Redwave Commerce’s Contract Invoicing solution lets companies receive these electronically as well so that the approval and payment process can be automated. Suppliers submit the details of the invoice and attach images of associated documentation. The service validates the information against defined contracts, normalizes the data and image formats and passes it to the buying company.
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Contract invoicing refers to invoices that your company receives for services provided by a 3rd party under contract and which must be manually approved. These types of services are very diverse and as such the structure and content of the invoices can vary dramatically. In order to approve payment of the invoice one or more individuals in the company with knowledge of the contract must review it. Once approved, information from the document is entered into the accounts payable system and then the original document, or a scanned image of it, is saved for audit purposes. For companies that receive hundreds or thousands of these invoices a month the process can be very involved, particularly if you assume that between 10% and 20% will contain errors, lack supporting documentation or be a duplicate.
For the most part EDI doesn’t help with these invoices because of the diversity in the services provided and the complexity of determining if the work has been completed. Further there is often a requirement for the contractor to include supporting documentation such as travel expense forms, receipts, phone bills, field requisitions and original quotes.
Redwave’s Contract Invoicing solution streamlines this process by eliminating the paper and pushing the data entry function out to the supplier.
It works as follows:
- Contractor’s sign on to their account on the Redwave portal where they can see the history of all transactions they have sent and received.
- They click the appropriate button to create a contract invoice object. Via a form they enter the key pieces of information that your back end system requires. Typically Invoice Date, Invoice Number, Contract Number, Invoice Amount, etc.
(Note it is also possible to import this data in a defined file format to save the data entry.)
- Any required business rules are applied to the data entered, such as a check for mandatory fields, test the validity of the contract number, test whether the invoice amount exceeds that specified in the contract, check if it is a duplicate invoice, etc. If data is invalid the contractor receives instant feedback and can either correct the data or abort the process.
- At this point an electronic image of the invoice and / or any required documentation is attached to the form. These files can be in a variety of formats such as JPEG, GIF, MS Word, MS Excel, PDF , RTF, TIF, TXT, etc.
- The contractor has now completed the process and can either send an additional invoice or disconnect. A copy of all information sent is store to the audit files for later reference.
- The invoice data and attached files are communicated to your system in the agreed format, typically EDI for the data and PDF for the images.
- Your system performs the internal approval workflow.
Having all the data electronic allows your entire approval process to be automated, saving time and money. Having your supplier perform the function of entering the key fields and attaching the files means the person with the best understanding of the data is doing the work, and that they will be assured that you have received and accepted the invoice. The reduction in errors will reduce their costs and result in quicker payment.
