A non-Purchase Order (PO) invoice can be frustrating for your Accounts Payable (AP) team. And when you’re processing invoices manually, this can be a costly and time consuming, administrative headache. Just as it sounds, a non-PO invoice is when someone in your organization purchases an item or service without a purchase order. Having a PO for the invoice can save man-hours as it captures the quantity, quality, price, buyer details, and links it back to the supplier – and it can even contain the appropriate coding.
It should be stated that in some cases, companies might not require a PO under a certain dollar threshold. However, these scenarios need strict policies to avoid the examples we’re about to dive into. If purchasing policies are followed, you can get faster payment to supplier, greater transparency of the invoice payment process, and increased budget flexibility and visibility.
When you don’t start with a PO and an invoice is received - and you have zero to go on - this causes havoc in the process with significant man-hours needing to be applied for these “special” invoices. Frustrations that typically arise can include:
AP turned Detective
Deciding how to route non-PO invoices can be extremely challenging, especially since these invoices frequently fail to include critical information. For example, when the invoice is received and doesn’t include specific information such as buyer contact details, business unit, or department, and in some cases the wrong name or billing address, detective work has to begin. AP investigates where the invoice came from, who made the order, if it was approved or not, and if the product or service was received. Sure, it might be fun to be detective for the day, but certainly not all the time.
When an invoice comes in blindly, not only could the invoice sit for weeks, but then once in the queue to process, the amount of time it takes to email the purchaser and ask for approvals could be at a snail’s pace. The purchaser will either search for approvals via email or start the approval process by emailing multiple people for review and approvals. Therefore, delaying the whole payment process.
Is the invoice actually genuine?
If an invoice is received with little to no details, it’s a red flag. For instance, it’s common for a supplier to leave off supplier contact details, include different supplier names, or miss important remit details. Also, if the email with the invoice attached doesn’t include any information in the email body, then AP could very well delete it for security reasons.
Non-PO invoices can result in late payments, damaging your credibility with your suppliers. Late payments could also lead to suppliers pausing services or goods being delivered.
If you don’t have a PO policy in your process, or you don’t have the means to create POs, or you simply don’t have the time, have a conversation
with us so we can help you create a more efficient and streamlined process. In the end, we’ll ensure all (finance, procurement, buyers) are happy with the outcome.