Back office: all you need to know about supplier and customer invoice processing

In the complex world of business, the efficient processing of supplier and customer invoices is an essential pillar of a company’s back office. Although often considered routine, this process is of fundamental importance to a company’s financial health and operational efficiency. This article takes an in-depth look at invoice processing, from receipt and processing to archiving. We will examine best practice, common challenges and emerging technology solutions to optimise this essential process.

Why is supplier and customer invoice processing crucial?

Efficient invoice processing is essential to a company’s financial health. Improved invoice document management optimises cash flow by collecting customer payments on time and managing supplier due dates. This fosters strong relationships with customers and suppliers, building trust and loyalty.

Invoice processing in business is strictly regulated by the General Tax Code and the Commercial Code (Code de Commerce). All professionals are required to issue an invoice for every sale they make, following a regulated process covering its creation, receipt, control, accounting, payment and archiving. Failure to comply with these rules may result in financial penalties, including fines.

Finally, if you are a company director, you can use the data obtained from the invoicing process to carry out a financial analysis of your organisation. You can use it to make crucial decisions, for example, on credit policies, pricing strategies or investments.

The problem is that it’s not always easy for companies to implement a process that enables them to manage customer and supplier invoices efficiently in the back office.

What are the different phases in supplier and customer invoice processing?

The invoicing process is different for supplier and customer invoices.

Processing supplier invoices

The supplier invoice handling process is a sequence of critical steps aimed at receiving, checking, recording and paying invoices from the company’s suppliers.

The main steps in this process are as follows:

Receiving the invoice

The invoice is received by the purchasing department or directly by the accounts department. It may be received by post, e-mail or electronically via electronic invoicing systems.

Validating the invoice

The invoice is examined to ensure that it complies with the terms of the contract and regulatory standards. This includes checking the accuracy of information such as the amount, products or services supplied, payment terms, etc.

Invoice approval

Once validated, the invoice undergoes an approval process. The relevant managers must check and authorise payment of the invoice in accordance with the company’s internal procedures.

Registering the invoice

The approved invoice is recorded in the company’s accounting system for inclusion in the accounts payable. This step involves assigning a unique reference number and archiving the invoice for future reference.

Payment processing

Once the invoice has been registered, it is ready to be paid. Depending on the terms agreed with the supplier, payment can be made by bank transfer, cheque or other payment method.

Account reconciliation, archiving and monitoring

After payment, supplier accounts are reconciled to ensure that all payments have been made correctly and that there are no outstanding balances. Finally, the invoice and associated documents are archived in accordance with current regulations and the company’s internal policies. Regular monitoring is carried out to resolve any problems or disputes and to continually improve the supplier invoice handling process.

Processing customer invoices

In the same way as supplier invoices are managed, customer invoices are also processed in several steps:

Generating invoice

Once a product or service has been supplied to the customer, an invoice is generated. This invoice should include information such as the customer’s name, the date of the transaction, a detailed description of the goods or services supplied, unit prices, applicable taxes, payment terms, etc.

Checking the invoice

Before being sent to the customer, the invoice is checked to ensure that it is accurate and complies with the agreed terms. This often includes a review by a sales or finance manager to ensure that all details are correct.

Sending the invoice

Once the invoice has been checked, it is sent to the customer. This may be by post, e-mail or via electronic invoicing platforms, depending on the customer’s preferences and the company’s business practices.

Payment tracking

After sending the invoice, the company must monitor the payments received. This involves ensuring that customers comply with the agreed payment terms and taking action to recover late payments if necessary.

Recording payments

Once payment has been received, it must be recorded in the company’s accounting system. This allows accounts receivable to be updated and an accurate record of payments made to be maintained.

Reconciliation of accounts

Periodically, customer accounts are reconciled to ensure that all payments have been recorded correctly and that there are no outstanding balances or billing problems.

Dispute management

In the event of a dispute over an invoice, the company must take steps to resolve the dispute with the customer satisfactorily, whether through billing adjustments, refunds or other arrangements.

What solutions are there to simplify supplier and customer invoice processing?

To make it easier to process supplier and customer invoices, companies can implement a number of technological and practical solutions:

Document management systems

By using electronic document management (EDM) software, supplier and customer invoices can be digitised, stored and organised efficiently, making them easier to access and manage.

Process automation

Process automation tools, such as workflow management systems, streamline the repetitive tasks involved in invoice processing. Deploying them not only optimises the operational efficiency of your employees, but also reduces errors and processing times.

Electronic invoicing systems

Electronic invoicing platforms simplify the sending, receiving and processing of invoices. They make invoices completely digital, speeding up the process and reducing the costs associated with managing paper invoices.

Integration with accounting systems

The integration of invoice management systems with the company’s accounting systems enables data to be transferred seamlessly. The approach ensures greater consistency and accuracy in accounts payable and receivable.

Self-service portals

Self-service portals allow suppliers and customers to access invoice information and documents, reducing the need for manual communication and improving transparency.

Outsourcing the back office management of supplier and customer invoices

To optimise the processing of your supplier and customer invoices, outsourcing is one of the solutions available to you. The solution is to delegate this part of the back office to a competent external service provider, such as ProContact. Outsourced invoice processing offers you just as many advantages.

Specialised expertise

Back office outsourcing providers have specialised expertise in the management of accounting processes, which guarantees high quality and accuracy in the processing of supplier and customer invoices.

Cost savings

Outsourcing the back office reduces the fixed costs associated with hiring and training staff, as well as the variable costs associated with managing the infrastructure and software needed to process invoices.

Focus on your core business

By entrusting the processing of your invoices to an external service provider, you can concentrate more on your core, strategic activities. You can invest more of your time and resources in growing your business.

Improved efficiency

External service providers often use optimised technologies and processes to manage invoices efficiently, which can lead to faster processing times and fewer errors.

Flexibility

Outsourcing allows a company to adapt easily to fluctuations in workload. It allows them to increase or decrease outsourced resources according to their needs.

Minimising risk

External service providers are often subject to strict security and compliance standards. As a result, the risks associated with regulatory non-compliance or data security are considerably reduced.

Entrust ProContact your supplier and customer invoice processing

ProContact offers complete back office outsourcing, with specialised expertise in supplier and customer invoice processing. Using advanced technologies and optimised processes, we ensure efficient, accurate and compliant management of your invoice flows. Our dedicated team handles every step of the process, from receipt and registration to verification and payment. Our outsourcing service guarantees you control over your expenses, operational efficiency for your staff, optimised productivity and business growth.

Make your back office a major asset to your success with ProContact! Contact us today for your tailor-made offer!