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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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3–45. Notify Purchasing of Lower Invoiced Prices or Terms

The payables staff is supposed to compare the prices on a supplier’s invoice to the authorized prices on the originating purchase order to ensure that the price on the supplier’s invoice is no higher than the authorized price. However, what should the payables staff do in the rare cases when the invoiced price is lower than the purchase order price?

The payables staff should post the lower of the two figures into the payables system as the one to be paid. In addition, they should notify the purchasing staff when these lower prices are charged, so their next purchase orders will incorporate the lower price. In addition, if other invoice terms, such as the early payment discount or payment duration, change in the company’s favor, then the payables staff should also forward this information to the purchasing department.

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