Vendor invoice checks: short ships, costs, credits

On this page

1. At the back door
2. In the office
3. Credits
4. Statements
5. Track mistakes by vendor
6. Keep the paper trail
7. A quick checklist

Invoices are where money leaves the store with the least attention. The mistakes are usually honest. A picker grabs the wrong flavor. A price file is out of date. A delivery gets billed twice. A credit gets promised at the door and forgotten by the time the statement prints. Honest or not, what you sign for is what you pay for, unless someone catches it.

Catching it takes two habits: checking at the back door and checking again in the office.

At the back door

Count before you sign

Nobody signs an invoice until the delivery has been counted against it, line by line.

• Count cases and units. A pallet or tote count doesn’t tell you what’s inside.
• Check the product itself. A case of the wrong flavor or size looks fine if you only count boxes.
• Open mixed cases and look inside.
• Check dates on perishables such as dairy, bread and sandwiches. Short-dated product may not sell in time.
• Look for damage: crushed cases, leaks, torn packs or broken seals.

When a line is short or damaged, write it on the invoice, have the driver initial it and keep your copy. Refuse anything you didn’t order. If the driver can write a credit memo on the spot, get one before the truck leaves.

Vendors who stock their own shelves

Some vendors fill the shelf or cooler themselves and hand you an invoice on the way out. Before they leave, compare what went onto the shelf with what’s billed. If they pulled stale or out-of-date product, check that the credit on the invoice matches what they took.

Set delivery rules

• Take deliveries only during set hours, when a trained person is on duty.
• Use one door for deliveries.
• Give one person per shift the authority to sign.

A delivery that shows up during a rush, with nobody free to count it, can wait until someone is.

In the office

Match the invoice to what came in

Enter or file invoices the same day if you can, and carry over every note from the back door: shortages, refusals and damaged goods. An invoice entered without those notes overstates what you received and throws off your next count.

Compare the delivery ticket with the final invoice

Some vendors hand you a delivery ticket at the door and send the final invoice later, by mail, email or file. Quantities and prices can change between the two. Compare them line by line before you pay, and question anything that grew after the truck left.

Check every cost

Compare each line’s cost with the last cost you paid and with any price list or promotion sheet from the vendor. Look for:

• Price increases nobody told you about
• Promotional allowances or deal pricing that should have applied
• A unit cost billed as a case cost, or the reverse
• The same item billed twice
• Items you didn’t order
• A change in case pack

The last one hides well. Take a hypothetical item that used to come 24 to a case at $18.00, or 75 cents a unit. The new invoice shows the same $18.00 case price, but the case now holds 20, so each unit costs 90 cents. If the item sells for $1.29, the margin falls from about 42% to about 30%, and the line on the invoice looks just like last time.

Check the extras

Fees, surcharges, deposits and taxes belong on an invoice only if your agreement says so. Know which ones you agreed to, and question any you don’t recognize.

Update costs, then look at retail

When a cost changes, update the item’s cost right away. Then decide whether the retail price needs to move. A cost increase that never reaches the shelf price shrinks your margin on every sale after it.

Credits

Credits are where money slips away most easily, because they depend on someone remembering. You’ll usually be owed credits for:

• Short shipments and mis-picks
• Damaged or refused product
• Returns of stale, out-of-date or recalled items
• Promotional money the vendor agreed to pay

Keep a credits-owed list. For each credit, write the date, vendor, invoice number, item, amount, reason and the name of whoever agreed to it. Check it off when it shows up on an invoice or statement. If it hasn’t appeared by the next statement, call your rep with the details in hand. A request with a date and an invoice number gets a much better answer than “I think you owe me something.”

Statements

Once a month, compare each vendor’s statement with your own records:

1. Every invoice on the statement should be one you received and signed.
2. Every credit you’re owed should appear.
3. No invoice should appear twice.
4. Every payment you made should be applied.

Pay from the statement only after it matches, and send any difference back to the vendor in writing.

Track mistakes by vendor

Keep a running note of every problem by vendor: short ships, wrong items, wrong prices and late credits. One mistake is a mistake. The same mistake every other week is a pattern, and a pattern is much easier to fix with a written list in front of your rep than with a memory of being shorted “a few times.” If one route or one driver keeps coming up, say so. A vendor can’t fix what it never hears about.

Keep the paper trail

File signed invoices by vendor and date, along with driver-initialed notes and credit memos. Scan or photograph them, so a lost paper copy doesn’t become a lost argument. Ask your accountant how long to keep them.

A quick checklist

• At the door: count, check the product and dates, note damage and get initials on every shortage.
• In the office: match the invoice, check each cost and fee, update costs, review retail and log any credit.
• Monthly: reconcile statements and chase open credits.

Advantage gives each store its own invoice email address. When a vendor’s invoice files come in a format Advantage reads, they are filed as vendor orders and update item costs. TXT, CSV and EDI files can also be uploaded by hand, a daily email lists cost changes, and paper invoices scanned at the store stay with the shift.