Invoice verification – this has to be considered in practice

Often an invoice verification consists of a quick look at the invoice. Whether the quantity of the goods fits and whether the invoice amount is correct. But unfortunately that is not enough when it comes to the tax office. We have summarized all the important information in this article so that you as an entrepreneur know what is important in an invoice audit.

Definition: What is an audit?

During an invoice audit, the accounting department checks an invoice for completeness and form . As a rule, an invoice is only approved and sent to the customer after it has been checked. In this way you ensure that there are no delays due to form errors . The same applies to incorrect amounts on the invoice. In addition, there are no discrepancies in the payment of the input tax or within the statement.

Factual and formal auditing

Invoicing varies depending on the value of the goods. The same applies to the invoice verification. A distinction is made between a factual and a formal audit. We will show you what these tests mean in detail below.

What is a factual audit?

The factual invoice verification checks whether the goods delivered or services rendered have been correctly invoiced . This is done by comparing it with the delivery note . The factual verification of the invoice should preferably be carried out by the person who initiated the order and received the services.

What is a formal audit?

Formal auditing ensures compliance with formal regulations . It makes sense to carry out the formal invoice verification as part of the entry of incoming invoices . This allows you to intercept an incorrect invoice before it is processed further. You can also request a new invoice from the supplier here.

If it is an order -related invoice , you have the option of billing all items listed on the invoice. It does not matter whether you have received one or more items as a partial delivery. All partial deliveries can be summed up and completed together in one booking.

If it is a goods receipt -related invoice , you must invoice each individual goods receipt separately. If you check an invoice without an order reference , it can be posted directly to the following accounts:

  • investment account
  • material account
  • ledger account

Who does the audit?

It depends on which office is responsible for the audit. For example, if this is in accounting , there are interfaces to logistics and purchasing . In other words, accounting requires data from logistics and purchasing. If you are a sole proprietor and do your own bookkeeping, then you alone are responsible for the invoice verification.

Is there an auditing obligation for companies?

In general, there is an obligation to audit. Although this obligation is not stipulated by law, if you do not check the invoices, then you must take responsibility for the errors accordingly.

Mistakes to avoid

There are different mistakes to avoid. Types of errors are:

Formal error : Mandatory information is incomplete (e.g. missing invoice number.)
Errors in content : Often due to incorrect communication between the supplier and the service provider (e.g. errors regarding the quantity of the services)
Calculation errors : due to incorrect operation of accounting software
What happens if the mandatory information is missing on the invoice?
The mandatory information is necessary for the input tax deduction. If one of these details is missing, you are not entitled to deduct input tax . For you, this can mean that you are left with high input tax amounts.

Procedure based on an example

Using an example, we will show you how to carry out a proper invoice verification and which steps you have to take:

Step 1: First, you check whether the invoice meets the legal requirements and whether the mandatory information is available. This step is also called formal testing .
Step 2 : This is followed by the factual examination . Check here whether the services have been provided correctly and without defects. You also compare the position of the invoice with that on the delivery note. You must also check that the individual prices and the resulting total amount are correct.
Step 3 : Next comes the sub-test . If other people are to be involved in the arrangement and clarification of an invoice, you should consult these people. In this way, differences and any existing questions can be clarified directly.
Step 4 : Finally, the invoice is released . In this case, it makes sense to involve a second person who takes over the release.

The digital invoice verification

The priority here is to make work easier . Because solutions for electronic invoice receipt usually automatically offer all functions for the invoice verification process. Here the following information is available in the system:

  • an order
  • delivery note
  • invoice

Leave a Comment