Use Case | Application of the Generative Model for Supplier Invoice Auditing

Use Cases: Application of the Generative Model for Supplier Invoice Auditing

General Description: Invoice auditing is essential to ensure that the amounts, items, and terms of the invoices issued by suppliers align with the agreements established in contracts and purchase orders. This model allows for the automation of invoice review, identifying discrepancies, and ensuring efficient financial control.

How It Works:

1. Invoice Upload:
   • Users upload supplier invoices in PDF format to the system.
2. Automatic Model Analysis:
   • The model reviews each invoice for consistency with previously agreed terms, checking:
     • Amounts: Does the total billed match what is stipulated in the contract or purchase order?
     • Items: Are the products or services billed correctly?
     • Discounts and Taxes: Are the agreed-upon discounts or taxes applied?
     • Payment Terms: Is the due date aligned with the agreed payment conditions?
     • Complete Information: Does it include all required details, such as invoice number, RFC, supplier details, etc.?
3. Evaluation and Classification:
   • The model classifies invoices as:
     • Compliant Invoices: Those that meet all established criteria.
     • Invoices with Discrepancies: Those with errors or omissions that require attention.
4. Report Generation:
   • A clear report is generated, which includes:
     • Compliant Invoices: Ready to be processed.
     • Invoices with Discrepancies: Highlights the problematic areas.
     • Recommendations: Suggested actions to correct identified issues.

Example of Use:

Scenario: A company wishes to audit 20 invoices issued by various suppliers to verify they comply with the terms set out in contracts and purchase orders.

Simplified Process:

1. Upload:
   • The manager uploads the 20 invoices to the system.
2. Automatic Evaluation:
   • The model checks each invoice to verify:
     • Whether the amounts match the agreed terms.
     • Whether the billed items are correct and complete.
     • Whether the agreed discounts were applied.
     • Whether the due dates align with payment terms.
3. Results:
   • Compliant Invoices: 15 invoices meet all the terms.
   • Invoices with Discrepancies: 5 invoices have issues:
     • Invoice 4: $1,000 excess in the total billed.
     • Invoice 8: Missing 5% discount as per the contract.
     • Invoice 12: Incorrect due date, earlier than agreed.
     • Invoice 15: Billed items do not match the purchase order.
     • Invoice 20: Missing contract reference number.
4. Generated Report:
   • Compliant Invoices: Approved for immediate payment.
   • Invoices with Discrepancies:
     • Invoice 4: Request correction of the total amount.
     • Invoice 8: Adjust to include the 5% discount.
     • Invoice 12: Confirm the correct due date with the supplier.
     • Invoice 15: Request a corrected invoice with accurate items.
     • Invoice 20: Add contract reference.

Benefits for End Users and Managers:

1. Reduction of Human Errors:
   • Automates the auditing process, eliminating the possibility of manual errors during review.
2. Financial Transparency:
   • Ensures that payments are accurate and justified, avoiding additional costs or inconsistencies.
3. Time Savings:
   • Reviews multiple invoices in minutes, speeding up workflow and reducing operational load.
4. Early Detection of Discrepancies:
   • Identifies errors and omissions before invoices are processed, preventing future financial issues.
5. Ease of Use:
   • Results are presented in accessible language, with clear, specific recommendations for each discrepancy.

Generated Report Summary:

• Invoices Analyzed: 20
• Compliant: 15
  • Meet all agreed terms.
• Invoices with Discrepancies: 5
  • Invoice 4: Excess total billed.
  • Invoice 8: Missing 5% discount.
  • Invoice 12: Incorrect due date.
  • Invoice 15: Billed items do not match purchase order.
  • Invoice 20: Missing contract reference.

Recommendations:

• Request corrections for invoices with discrepancies before processing payments.
• Confirm the agreed terms with suppliers to avoid future inconsistencies.

Conclusion: The generative model for Supplier Invoice Auditing provides a fast and efficient solution for validating invoices, ensuring they accurately reflect the agreed terms. Its ability to identify discrepancies and generate clear reports enables managers and end-users to optimize the payment process, reduce financial risks, and improve supplier relationships.