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Process 115

invoice is accurate before it makes payment. The most common method
of invoice verifi cation is a three-way match between the purchase order, the
goods receipt or delivery document, and the invoice. The objective is to ensure
that the quantities and price in all three documents are consistent. An alterna-
tive is a two-way match between a purchase order and the goods receipt docu-
ment. This method is not very common, and it requires a high degree of trust
and cooperation between partners. In our example, GBI placed a purchase
order for 500 t-shirts from Spy Gear. The Miami plant received the Spy Gear
shipment of 5 boxes of 100 t-shirts (500 total). Spy Gear sent GBI an invoice
for 500 t-shirts. Further, the price in the purchase order and invoice are the
same. Thus, GBI can make a three-way match between the 500 units it ordered
for $15 each, the 500 units it received, and the 500 units it was invoiced for
$15 each.

Figure 4-26: Elements of the invoice verifi cation step

Data
Figure 4-27 identifi es the data that are needed to complete the invoice verifi -
cation step. The data obtained from the invoice include the vendor number,
invoice date, invoice quantity, and invoice amount. The data from the pur-
chase order include vendor number, materials, quantities, and price. Finally,
the materials and quantities received are obtained from the material document
created during the goods receipt step.

Figure 4-27: Data needed for invoice verifi cation

31/01/11 7:35 PM
CH004.indd 115 31/01/11 7:35 PM
CH004.indd 115