Version 1.0
Prepared by: @Lorraine Sebata
Approved by: @Marcia Wilkinson
Reviewed date: 2025-09-13
Next review date: 2026-09-12
This procedure outlines guidelines for documenting bills received, verifying their accuracy against purchase orders or agreements, and posting them to the appropriate accounts in the accounting system. Its purpose is to facilitate timely payment to suppliers or service providers, ensure accurate financial records, and maintain effective control over expenditures.
This SOP applies to the Accountant and Operations Manager involved in the processing and approval of bills for all operational and administrative expenditures of Easyterms. The process involves verifying the accuracy of billing details against purchase orders or agreements (where available), obtaining necessary approvals, and accurately entering the bills into the accounting system for payment processing and timely recording of liabilities.
Vendor/Service Provider: Issues bills for goods or services rendered.
Requesting Department/Staff: Confirms receipt of goods or services.
Accountant: Primary responsible for receiving, reviewing, verifying, and entering bills into the accounting system; ensures compliance with this SOP.
Manager: Reviews and approves bills for posting and payment within their delegated authority limits.
5.1.1 Receive bills from vendors or service providers (physical or electronic)
5.1.2 Conduct an initial review of the bill for completeness (e.g., vendor name, invoice number, date, amount, description of goods/services)
5.1.3 Confirm with the requesting department/staff that the items or services listed on the bill were indeed received and are satisfactory
5.2.1 Once confirmation of items/services received is obtained, retrieve the related purchase order (PO) from the Accounting software (e.g., Xero)
5.2.2 Reconcile the purchase order and the bill received:
Compare the items and/or services on the bill against the PO to ensure they match exactly
Ensure the totals (amount, taxes) on the bill match the PO
5.2.3 In the event that items and/or services are correct but totals differ, immediately contact the vendor to request a corrected bill. Do not proceed until a correct bill is received
5.2.4 Once the correct bill has been received and confirmed to match the PO, log in to the Accounting software (Xero) and access the relevant purchase order
5.2.5 Convert the purchase order to a bill within the Accounting software. Ensure all details are accurately transferred
5.3.1 In the event a bill has been received for which no purchase order exists (e.g., regular monthly utility bills, subscriptions, or ad-hoc expenses not requiring a PO as per Procurement Policy)
5.3.2 Investigate the bill to confirm its legitimacy and ensure it relates to a valid business expense of Easyterms. This may involve confirming with the relevant department head or budget owner
5.3.3 Once the bill's legitimacy is confirmed, log in to the Accounting software (Xero), locate the vendor's account and post it under the vendor.
5.3.5 Enter all required details accurately, including vendor name, invoice date, due date, invoice number, description of goods/services, quantity, unit price, account code and total amount.
5.3.6 Attach a scanned copy of the bill to the entry in the accounting software
5.3.7 Click 'Save & Submit for Approval'
5.4.1 The Accountant advises the relevant Manager of the entered bill and requests their approval
5.4.2 The Manager reviews the submitted bill in the Accounting software, verifying the details, supporting documentation (if any), and ensuring it aligns with budget and company policies
5.4.3 The Manager approves or rejects the bill within the Accounting software
5.4.4 If rejected, the Manager provides clear reasons for rejection, and the Accountant follows up with the vendor or requesting department as necessary
5.5.1 Once a bill is approved by the Manager, the Accountant ensures it is scheduled for timely payment in accordance with agreed payment terms with the vendor.
Vendor Bills/Invoices
Purchase Orders (within Accounting Software)
Accounting Software (e.g., Xero) Records
Confirmation of Goods/Services Received (e.g., delivery notes, email confirmations)
All Accountants and Managers involved in the payables process will receive mandatory training on this SOP and related policies annually or upon significant revisions.
This SOP will be reviewed annually by the Finance Department to ensure its continued effectiveness, compliance, and alignment with business objectives.
See how to create a bill from a Purchase Order in Xero Central