PO vs Non - PO Invoices

A strong supply chain consisting of reliable sourcing partners accelerates the growth of successful enterprises. To build successful supplier relationships, each enterprise ensures to make fast payments for vendor invoices received. The vendor invoice can be divided primarily into PO invoices(having reference Purchase Order) and Non-PO Invoice(Vendor generated without any PO reference). To reduce average receipt-to-invoice cycle time, Accounts Payable teams use different digital tools such as ERP, A/P automation tools, and lately even ServiceNow to replicate invoice approval workflow. In this presentation, we will learn the difference between PO & Non-PO invoices, and understand the best practices to implement a successful invoice approval workflow process using the ServiceNow platform.

1. Best Practices: Automating Invoice Approval Process for PO vs. Non-PO Invoices Delivering the Future of Work Experience © Aavenir All rights reserved.

2. “23% of companies shared that non-PO invoice processing is one of their biggest pain areas. The remaining are still figuring a way out to process PO-based invoices faster, as a part of their digital transformation.” The accounts payable function need to ensure fast and accurate payments for each supplier invoices received. The Invoice Approval Process is different for each invoice type. When automating accounts payable it is critical to understand the difference between PO and Non PO invoice. The supplier invoice can be divided primarily into : PO invoices(having reference Purchase Order) Non-PO Invoice(Vendor generated without any PO reference). ‹#› INTRODUCTION

3. What is a Purchase Order Invoice? A PO (Purchase Order) invoice is the invoice raised by the vendor based on the purchase order created by the buyer. PO invoices typically include purchase order number for purchases of direct goods or services. And, we can find the all details of the supplier and requested goods or services. The PO invoice will be matched against the purchase order to ensure all details correspond. In most cases, companies will perform a 3-way invoice matching to verify the PO invoice details matches both the purchase order and the goods receipt © Aavenir All rights reserved. ‹#› PO Invoice Examples: Vendor Invoices with PO Vendor Contracts Normal Goods Invoice

4. What is a Non-PO Invoice? Non-PO invoices are those invoices raised by either the vendor that does not have a purchase order associated with the invoice Sometimes Non-PO invoices are also used to make supplier payment when an invoice is under direct spend budget/ limit. © Aavenir All rights reserved. ‹#› Non- PO Invoice Examples: Travel Reimbursement Mileage Reimbursement Miscellaneous Expenses Release Orders Service Invoices(from Service Sheets)

5. Difference between PO vs. Non-PO Invoices : © Aavenir All rights reserved. ‹#› PO Invoice Non-PO Invoice 1 A purchase order is associated with the invoice raised. A purchase order is not associated with the invoice raised. 2 Primarily used for Direct Purchase or Procurement Primarily used for Indirect Procurement or Purchase 3 The purchase order reference is pre-approved The invoice approval process is not pre-approved and has prepared and Approver in some cases . 4 Faster Invoice Approval & Processing Slower Invoice Approval & Processing 5 Greate r transparency of the invoice payment process Less transparency of the invoice payment process 6 All goods can be clubbed into a Single Invoice Can have multiple invoices 7 Ideally used for normal procurement Ideally, used during discretionary spends(below tolerance limits) or emergency procurement of goods or services

6. ‹#› Best Practices: Processing of PO Invoices R esponsibility of the Preparer and Approver to ensure that transactions they submit are correct and compliant. R ead all warnings and errors for each transaction before submission. Series of quality assurance checks help maintain accurate data of purchase orders to reduce errors

7. Best Practices: P rocessing of Non-PO Invo ices Procurement department performs spot audits on Non-PO Invoices to ensure transactions are compliant (i.e., items are not on the exceptions list). © Aavenir All rights reserved. ‹#› W ithin each department, d efine a seamless workflow between Preparers and Approvers for Non-PO Invoice payments. Use of Intelligent predictions for easy invoice validation for verifying and validating non-PO invoices

8. Aavenir’s Invoiceflow to Rescue © Aavenir All rights reserved. ‹#› Pre-configured metadata identification of invoice number based on previous invoices from the same supplier or cost center Automatic distribution to the relevant approver based on the organization’s approval hierarchy Automatic approval by matching recurring invoices (such as a lease) to the payment plan in a contract Aavenir’s Invoiceflow delivers faster AI-enabled invoice processing with fewer touchpoints, reduced errors, and more early payment discounts, thus improving the vendor invoice processing. To know more about Aavenir Invoiceflow: https://aavenir.com/accounts-payable-automation-software-invoice-processing-servicenow/ To see Aavenir Invoiceflow live-in-action on ServiceNow Schedule a Demo

9. Onward and Upwards with Aavenir! Thank You ! © Aavenir All rights reserved. ‹#› www.aavenir.com linkedin.com/company/aavenirinfo [email protected] twitter.com/AavenirInfo