Invoice Processing Procedure

Document Type: Procedure
Version: 1.0
Last Updated: February 2026
Distribute To: AP Team, Project Managers, Approvers

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Purpose

Establish a consistent process for receiving, verifying, approving, and paying vendor invoices.

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Invoice Processing Flow

Receive → Verify → Match → Code → Approve → Enter → Pay → File

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Step-by-Step Process

Step 1: Receive Invoice

Receipt Methods:

• Email (preferred)
• Mail
• Portal/EDI
• Hand delivery

Upon Receipt:

• Date stamp
• Log receipt
• Route for processing

Step 2: Verify Invoice

Check For:

• Vendor name matches records
• Our company/project name correct
• Invoice date and number
• Description of goods/services
• Quantities and prices
• Correct total
• Payment terms stated

Step 3: Three-Way Match

Match invoice to:

1. Purchase Order - What was ordered
2. Receiving Document - What was received
3. Invoice - What's being charged

All three must agree before payment.

Step 4: Code Invoice

Required Coding:

• Project number
• Cost code
• GL account
• Amount per code (if split)

Step 5: Obtain Approval

Route to Approver Based on Amount:

Amount	Approver
$0 - $500	Foreman
$501 - $5,000	Superintendent
$5,001 - $25,000	Project Manager
$25,001 - $100,000	Operations Manager
$100,001+	Executive

Approver Verifies:

• Work was received/performed
• Pricing is correct
• Coding is accurate
• Authorized for payment

Step 6: Enter in System

Data Entry:

• Vendor
• Invoice number
• Invoice date
• Due date
• Amount
• Project/cost code
• Description

Step 7: Schedule Payment

Payment Timing:

• Per vendor terms
• Consider early payment discounts
• Coordinate with cash flow

Step 8: Process Payment

Payment Run:

• Weekly (typical)
• Review payment batch
• Obtain signatures
• Mail/transmit payments

Step 9: File Documentation

Retain:

• Invoice
• PO
• Receiving document
• Approval
• Payment record

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Invoice Approval Form

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           INVOICE APPROVAL
================================================================

Vendor: _____________________________________________________

Invoice #: ____________________  Date: _______________________

Amount: $_____________________________________________________

Description: _________________________________________________

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THREE-WAY MATCH:

PO #: ____________________  ☐ Matches  ☐ N/A

Receiving Doc: ______________  ☐ Matches  ☐ N/A

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CODING:

| Project | Cost Code | Amount |
|---------|-----------|--------|
|         |           |        |
|         |           |        |
| TOTAL   |           |        |

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APPROVALS:

Coded By: ________________________  Date: ___________________

Approved By: _____________________  Date: ___________________

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☐ Approved for Payment  ☐ Hold (Reason: ___________________)

================================================================

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Handling Discrepancies

Price Discrepancy:

1. Compare to PO
2. Contact vendor
3. Request credit or corrected invoice
4. Document resolution

Quantity Discrepancy:

1. Verify receiving records
2. Contact vendor
3. Pay for quantity received
4. Document shortage

Unauthorized Purchase:

1. Identify who ordered
2. Determine if legitimate
3. Create PO if approved
4. Address compliance issue

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Payment Terms

Common Terms:

Term	Meaning
Net 30	Due in 30 days
Net 10	Due in 10 days
2/10 Net 30	2% discount if paid in 10 days
Due on Receipt	Due immediately
Net 45	Due in 45 days

Early Payment Discounts:

• Calculate savings
• Compare to cost of money
• Take if beneficial

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Common Issues

Issue	Resolution
No PO	Create confirming PO if legitimate
Missing receiving	Verify with field, document
Duplicate invoice	Verify against records, return
Wrong vendor	Return to vendor
Missing approval	Route for approval

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Related Documents

• Purchase Order Process
• Vendor Setup Procedure
• Check Request Form

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