{"id":6027,"date":"2023-03-23T19:09:13","date_gmt":"2023-03-23T19:09:13","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=6027"},"modified":"2023-03-23T19:09:13","modified_gmt":"2023-03-23T19:09:13","slug":"invoice-errors-do-you-block-and-research-reject-short-pay","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2023\/03\/invoice-errors-do-you-block-and-research-reject-short-pay\/","title":{"rendered":"Invoice Errors \u2013 Do You Block and Research? Reject? Short-Pay?"},"content":{"rendered":"

Introduction<\/strong><\/p>\n

Every process within the scope of Global Business Services has hundreds of detail process steps and procedures that often evolve over time, without close inspection to see if each process is truly optimized.\u00a0 One example of a detailed process with design variations between companies is the process followed in Accounts Payable (P2P) for when an invoice that is received either electronically or by paper has incorrect or unauthorized charges.\u00a0 How are these invoices handled?\u00a0 Are they rejected and sent back to the vendor for correction?\u00a0 Is best practice to block these invoices until the issue can be research and resolved? If they are blocked, what organization in the company has ownership?\u00a0 Does it ever make sense to deduct incorrect or unauthorized charges and simply short pay the invoice?<\/p>\n

Fortunately, for Peeriosity-100 members, it\u2019s easy to draft a Polling question and instantly learn how other members tackle the problem, with the ability to directly follow up with other participants for further discussion and dialogue.\u00a0 With Peeriosity-100, your poll will go to hundreds of members for possible response, with those that have knowledge providing inputs that are likely to be directly on point to solving your issue, all at no cost to you. \u00a0Plus, the exchange is completely private, with only members whose companies provided an answer to the poll questions able to access the detailed results and findings.<\/p>\n

Polling Results Review<\/strong><\/p>\n

At Peeriosity-100 members can quickly get insights from other members, with the ability to follow up directly with the people who respond to get more information, or to continue the discussion.\u00a0 \u00a0Recently the Global Trade Payables Leader at a member company wanted to better understand options related to this topic.\u00a0 As she explained, \u201cWe have vendors who invoice incorrectly or not in line with the purchase order as they may include surcharges or freight. We also have vendors that charge tax when we should be tax exempt. Currently we block or reject invoices and wait until a corrected invoice is received or if the extra charges are approved by the business approver, the invoice is paid in full. We are wondering how other companies handle these situations and if it is common practice to short pay invoices.\u201d<\/p>\n

The first poll question asked, \u201cWhen you receive an invoice that has incorrect or unauthorized charges (i.e., surcharges, freight, tax) what is your primary way to handle these invoices?\u201d\u00a0\u00a0 The most popular answer, at 41% of responding Peeriosty-100 member companies, is to block the invoice until Procurement or the business reviewer discusses with the vendor.\u00a0 \u00a0\u00a0An additional 32% of companies reject the invoice back to the vendor and request a corrected invoice.\u00a0\u00a0 Finally, 16% short pay if the issue is a tax charge that isn\u2019t appropriate and otherwise block the invoice, and 11% short pay the invoice in most circumstances.\u00a0 Here are the details:<\/p>\n

\"\"<\/p>\n

The second poll question drilled down into the issue for how the short pay invoices were communicated with vendor and who was responsible to answer vendor inquires related to short-payments, for companies who were using the short-pay approach.\u00a0 For 50% of companies, communication and responding to inquiries was the responsibility of the AP Helpdesk.\u00a0 The balance of 50% was evenly split between Procurement and another group having responsibility for communication and responding to inquiries.<\/p>\n

\"\"<\/p>\n

Here are some of the comments from Peeriosity-100 members:<\/p>\n