What is invoice reconciliation?

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Invoice reconciliation is a process that involves comparing invoice data with bank statement data. It is a very important task for all businesses. Invoice reconciliation applies to both invoices for purchased goods and services and invoices issued to customers. Thanks to this operation, you can check whether you are late with your payments for business-related purchases. This will allow you to better control your accounts receivable. Read the article to find out why invoice reconciliation should not be neglected.

Invoice reconciliation – the content of the article:
How to reconcile received invoices?
What are the benefits of reconciling incoming invoices?
How to reconcile issued invoices?
What are the benefits of reconciling issued invoices?
Is it possible to reconcile invoices manually?
How to improve the invoice reconciliation process?
How to reconcile received invoices?
Every time you purchase goods, you receive an invoice. The same goes for services – these are also settled with invoices. If your business has recently appeared on the market, there is a risk that not all partners are belize whatsapp number database to sell your products or services with deferred payment. In this scenario, you will have to settle your payments in cash. This payment method means that you do not have to reconcile the invoices you receive. In the case of cash invoices, you can always rest assured knowing that they have been settled.

After some time, as your company becomes more known to contractors, more and more companies will be willing to sell their products to you on a deferred payment basis. This is beneficial because when you buy products, you do not have to invest your funds immediately. Your only task is to keep an eye on the payment deadlines. Invoice reconciliation helps in this important endeavor. How to reconcile invoices?

All you need to do is compare the invoices you have received, that is, those you have received from other companies, with your bank account. To speed up the process, you can decide to filter the invoices you have received. After this operation, you will have the complete list of transactions with all the details about the payments made for products and services. With this list in hand, you will have to compare the amounts on the invoices with those on the bank statements. Check that all the money transferred has reached the correct recipient by comparing the details of the invoice issuer with the details of the invoice recipient. If these details match and everything is correct, you can mark the invoice as paid.

invoice reconciliation - revenue cycle
What are the benefits of reconciling incoming invoices?
Why is reconciling invoices received in your company so important? This operation helps you keep track of all payment dates and deadlines. If after reconciliation you still have invoices, but there are no corresponding transfers, this means only one thing – you have not paid these invoices. In this situation, you should check whether the payment deadline has been exceeded. If some of the transfers have not been made, check your account in the pending orders section, they may be waiting to be fulfilled; in this case, there is no cause for alarm. However , if the payment deadline has been exceeded and the invoice has not been paid, it is better to settle all outstanding payments as soon as possible.

Payments made after the due date can have negative consequences for your business. What kind of consequences? The issuer of the invoice that was not paid on time may charge interest for the extension of the payment. Late payment may result in the loss of discounts and rebates. Payment issues affect the image of your company, because no one likes to cooperate with entities that are habitually late in making payments. Invoice reconciliation helps you avoid such problems; with this process, you will be able to meet your obligations on time.

How to reconcile issued invoices?
Issued invoices are invoices sent by your company to your customers when your product has been sold or your service has been provided. Reconciling issued invoices will help you keep an eye on all your obligations. Thanks to this operation, you will know exactly who has paid you and who is late in paying. How, in fact, is the reconciliation of issued invoices done?