What does the invoice reconciliation process involve?

The invoice reconciliation process primarily involves creating a document for any discrepancies found between the invoice and the corresponding purchase order or goods receipt. This step is crucial for maintaining accurate financial records and ensuring that all transactions reflect actual business operations. When discrepancies arise, this documentation serves to clarify misunderstandings, which may involve price variances, incorrect quantities, or other issues. This methodical approach ensures that both the finance and procurement departments have a clear understanding of any discrepancies that need to be addressed, allowing for accurate and timely payments to suppliers.

In contrast, reviewing the entire procurement cycle encompasses a broader scope that includes many elements beyond just the reconciliation of invoices. This option does not focus specifically on addressing discrepancies in invoices. Automatically approving all invoices fails to take due diligence in verifying that amounts are correct and aligns with received goods or services. Finally, rejecting all non-matching invoices would not be a comprehensive approach, as it overlooks the importance of investigating and resolving discrepancies. It is essential to manage discrepancies instead of defaulting to outright rejection, as this could strain supplier relationships and lead to potential disruptions in procurement.