When processing an expense report or supplier invoice for payment, which items should you verify before approval?

Introduction / Context:
Accounts payable teams are responsible for ensuring that expense reports and supplier invoices are valid and accurate before releasing payments. Interviewers often ask what checks you would perform when processing an invoice. This question tests your understanding of basic internal controls in the procure to pay cycle.

Given Data / Assumptions:

• An expense report or supplier invoice has been submitted for payment.
• The organisation follows standard internal controls such as authorisation and three way matching.
• The person processing the invoice has access to purchase orders and receipts where applicable.
• We need to identify the answer that lists the key verification steps.

Concept / Approach:
Proper invoice processing involves verifying vendor data, invoice details, amounts, and approvals. Where purchase orders exist, the invoice should be matched against the order and the goods receipt to ensure that quantity, price, and terms are correct. Employee expense reports should be checked against company policy and supported by receipts. Skipping these checks exposes the organisation to overpayments, duplicate payments, and fraud.

Step-by-Step Solution:
Step 1: Confirm that the vendor or employee is correctly set up in the system and that bank account or payment details are valid. Step 2: Review basic invoice fields such as date, invoice number, description of goods or services, tax information, and total amount. Step 3: Match the invoice to the related purchase order and goods receipt, or to the relevant approval documentation in the case of an expense report. Step 4: Ensure that the expense is coded to the correct general ledger account and cost centre. Step 5: Check that the invoice has proper authorisation from an authorised approver before scheduling payment.

Verification / Alternative Check:
A well designed accounts payable process will prevent duplicate payments by checking invoice numbers and vendor combinations. It will also ensure that amounts do not exceed approved purchase orders. Running exception reports or audit logs can help confirm that the checks have been performed. These verification steps create a strong audit trail and reduce the risk of financial misstatements.

Why Other Options Are Wrong:
Checking only the total amount and ignoring supporting documents is risky and fails basic control requirements. Approving every invoice from a known supplier without review can allow errors or fraudulent charges to slip through. Rejecting all invoices and demanding resubmission is unrealistic and would disrupt business operations.

Common Pitfalls:
Some staff may over rely on supplier reputation and skip proper matching. Others may not pay attention to tax details or general ledger coding, leading to reporting errors. Time pressure can also cause shortcuts, such as not checking approvals thoroughly. Remember that consistent verification protects both the organisation and the employees involved.

Final Answer:
Before approving an expense report or invoice for payment, you should verify vendor details, invoice date and number, description, amount, approvals, and match the invoice with purchase order or receipts.