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The top 5 reasons invoices are rejected by customers

16/05/2022

A study of more than eight million invoices has revealed the top five reasons some are rejected by customers and not processed for payment.

Of the 8,052,300 invoices reviewed by Causeway Technologies, which were sent by suppliers to 100 companies in the construction sector last year, more than 810,000 – or 10% – were rejected because they didn’t meet the rules of the receiving business.

Rejected or disputed invoices will inevitably result in delays in payment being made, which can impact the business’s cash flow.

Although just a small snapshot of the billions of invoices sent to customers by British businesses each year across all sectors, the study highlights the importance of making sure the information on invoices is correct before sending them to customers.

The top five reasons those invoices were rejected by customers were:

  1. The purchase order number on the invoice sent by the supplier wasn’t a valid open purchase order from the customer
  2. The value on the invoice sent by the supplier exceeded the value on the purchase order or receipted value of goods against that order
  3. The total value or total tax submitted in the invoice didn’t match the sum of the line items on the invoice
  4. The customer’s company name on the invoice was incorrect
  5. A product code on the invoice didn’t match a product code in the catalogue held for that supplier

Each of these issues is easily avoidable, provided the processes and structure is in place to generate and verify invoices before they are issued.

From our 21 years’ experience in providing outsourced credit control and debt recovery services to businesses of all sizes, these actually only scratch the surface of the invoicing issues we commonly see which contribute to slow customer payment and high DSOs.

On working with one customer recently to help them identify ways to improve the efficiency and performance of their credit management function, we discovered their invoice template lacked a crucial piece of information: the payment terms.

Surprisingly, this isn’t as rare as you might expect. We have even seen invoices which didn’t contain any payment information, such as the bank account details.

As well as ensuring your invoices include all of the essential information, there are also a number of best practice and sometimes unusual steps businesses can take to get invoices paid faster.

Click here to see our 10 characteristics of a successful invoice, as well as our sample invoice template which includes all the information we’d expect to see.

If your business is struggling with late payment or would like to find ways to improve the performance of your credit control function, we can help. An award-winning credit control and debt recovery agency, we have been helping businesses to get paid faster since 2001. Call us on 0800 9774848 or schedule a call back at a convenient time to speak to our expert team.

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Just some of our clients

  • Mazars
  • Leumi ABL
  • Close Brothers Invoice Finance
  • Wupwoo
  • Barclays
  • Wote Street People
  • PNC Business Credit
  • Quantuma
  • Eazipay
  • Kroll
  • NatWest
  • Santander Corporate & Commercial
  • Leonard Curtis
  • Smith & Williamson
  • Kreston Reeves
  • Custom Glass
  • SER Contractor
  • Harrisons Business Recovery
  • Construction Recruitment Services
  • FRP Advisory
  • BNP Paribas
  • Midland Rock

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