2D: Errors in invoice charges are identified and corrective action is

undertaken within delegated authority

Apart from verifying the receipt of goods and services, one of the other major roles of an invoice
that a payments clerk must check is that the invoice has been prepared correctly by the supplier.

This involves checking that the:

correct unit price has been charged for each item
subtotals have been added up correctly
GST has been calculated correctly
discounts that are applicable have been applied
discounts have been calculated correctly
grand total is correct

Discrepancies can usually be found by manually checking invoices or by being alerted to them by a
process in a payments system which sends a warning/flags discrepancies as the particulars are entered
in the business's financial management software if particulars of an invoice differ from the those on
purchase request.

Invoice discrepancies can be as a result of:

careless data entry
calculation errors
miscommunication
illegible writing
complex service agreements

Where there are multiple discrepancies of the same type it is helpful to collate them into a single
document so that any patterns can be detected. Patterns may indicate the need for further
training/ education of co-worker or that there is a software problem that needs attention.

Taking corrective action

Where a payments clerk identifies an error they should attempt to fix the problem, while working
within the limits of their authority. Where the payments clerk suspects that the error is a simple
mistake they could contact the supplier, explain the calculation error including identifying what
the correct amount should to be, and ask that the invoice adjusted and re-submitted. As suppliers
want to be paid quickly, they are usually happy to do this as long as the problem is clear.

By working with suppliers on payments and other matters, it helps to build a relationship of trust.
A good working relationship means that suppliers are more likely to provide better service, such as
helping out when goods/ services are needed quickly and be understanding should the purchasing
company have any documentation errors, resolving issues about incorrect orders, in the future.

Once all invoice discrepancies have been sorted, it is essential to maintain the accuracy of all other
financial records by completing the correct paperwork. This might be as simple as stapling the
corrected invoice on top of the original invoice and marking it as paid before placing it into the filing
cabinet or it can be making an electronic note against a digitally held record.

Where a discrepancy is unable to be resolved by the payments clerk, because it is in dispute, it is

beyond what they are allowed, or they simply do not know what to do, then it should be referred to
their immediate supervisor. While invoice discrepancies are often discussed with a superior verbally,
many companies also require the information to be documented in writing.

Now complete the learning task below. (called task 8 in the

activities tab)

1. Explain why it is important to check that invoice charges have been calculated correctly. (50-80 words)
2. You have been sent an invoice to pay from a regular supplier but upon checking it you realise that
the discount for a volume purchase has not been applied. Explain the action that you will take.
(Approx. 100words)
3. The following invoice arrives for the items in activity 7.

Office Warehouse
27 Bumpy Road
Outathaway 1111
Ph 61 02 98721099
Tax Invoice
Date: 29/08/20XX

Invoice to:

Office of Dreams
1203 Lost Way
Our Town

Qty Item # Description unit price

total price
3 9024311 Lead pencil HB box 12 2.69
1 9137289 Ballpoint pen black box 12 4.57
4.57
1 0381928 Ballpoint pen blue box 12 4.57
1 4300981 Ballpoint pen red box 12 4.57
1 6712938 File cards 150x100mm pack 100 1.83
1 89134C4 foldback paper clips 25mm Box 100 6.41
2 1000111 Copy paper A4 ream 3.76
5 7888991 Coloured pencils pack 12 asstd 1.26
4 3893345 Display folders A4 Avery 2.88
3 2340002 Correction fluid bottle 1.92
1 2910332 26/6 staples box 5000 5.55
1 4902034 4 asstd colour whiteboard markers (pack) 6.41
2 6783493 Post it notes 78x78mm pack 6 8.12
1 3402935 Highliter blue box 10 12.23
1 5424256 Highliter pink box 10 12.23
1 7564734 Highliter yellow box 10 12.23
1 3245633 Highliter orange box 10 12.23
1 4551235 A4 laminating pouches 80microgram box 100 37.24

Subtotal
GST
Total

TERMS: Strictly 14 days See reverse for Payment Options

a. What errors does it contain?

b. How would you resolve these errors?