Last post we talked about 2-Way / 3-Way matches and on PO / Non-PO invoices. https://faoblog.com/processes-ap-po-non-po-2/
One comment came from one of our readers on Linked-in that a two way match could also be on account of matching Invoice with PO. Also, the reader mentioned that both Amount and quantity need to be matched. I agree and concur with the reader. In fact the matching has to be of the item description and specifications, the tax components etc. I would like to thank the reader, Nishita Nigam Saxena for elaborating this.
I had also in an earlier post mentioned a good set of other types of invoices. https://faoblog.com/processes-ap-invoice-processing-types/
Let me briefly describe each type.
- Prepayments / Remittances – this will include any advance payments. Some organizations actually process advance payments against the quotes received just like invoices, but the entry for the debit is to the vendor and credit to payment mode.
- Payments needing special reporting (Like items to be reported in 1099) – this may need a special / separate workflow so that details can be extracted at the click of a button.
- Capital Equipment purchases – these normally are of a very high value and will normally need special / executive / very senior level approvals. Most organizations create a separate payment type for these. Also the debit for this will go normally to an asset or a deferred revenue account. These will demand a special treatment.
- Trade-in-equipment invoice – this comprises of any equipment used as a trading item.
We will continue on this in the next post. The link? Oh well, let me first write the post 🙂
And, don’t miss the post tomorrow. It’s a good report on AP.