Establishment of a quality gate for incoming invoices with our validation API

Before we get started, we would like to point out that we cannot and are not allowed to give tax advice in our articles. Instead, we would like to show you how you can use technical means to relieve correction processes in the financial accounting environment.

Let's imagine the following scenario: You receive a large number of incoming invoices via EDI from your suppliers. Of these, a certain percentage are incorrect each month, so they have to be reprocessed. In one case, the requirements of § 14 (4) of the German VAT Act were not fully complied with, in another, a reference to the supplier's payment terms is missing. Your goal in such cases is to automatically send an email with an error report to a contact person at the invoicing company. The report should explain the errors and provide instructions for next steps. In this way, the manual effort for corrections is reduced and the financial accounting department is relieved.

In the first step, we work out the process together with them. We clarify which errors are made in practice, in which cases an invoice correction or an invoice cancellation must be made and when a note from the supplier to you is sufficient. The errors may be due to the structure of the EDI file - for example, a mandatory segment is missing or the maximum length of a field has been exceeded. But there may also be a logical problem, for example if the sum of all item amounts does not match the corresponding value in the totals part of the invoice. Based on these specifications, we create the validation interface and test it together with you until all cases that occur in reality are covered.

Next, we need to decide how the records to be checked will get from you to us. The obvious way would be to send them via HTTPs to our validation API, but sending them via SFTP or email would also be possible. Since in this example we plan to send the check results via email to the original invoice senders, we need the corresponding contact persons for data quality including their email addresses.

The email should not only contain the error report in the attachment, but also a text on how the invoice sender must now proceed. Here, for example, an email box or a telephone number of the financial accounting department could be mentioned, which the contact person can get in touch with. However, as much information as possible should already be included in the error reports themselves, especially how the invoice sender should react to certain error types.

After we have worked out all the components of the quality gate, it makes sense to first monitor a smaller part of the productive data stream. This could be done, for example, for invoices for a specific cost center, or for specific data senders. If minor changes are required, we can implement them without having to inform all data senders. When the pilot operation was successful, the quality gate can be extended in the last step to the verification of all incoming EDI invoices. The employees in your financial accounting department now no longer have to manually write error reports for EDI invoices and can spend the time gained on other tasks.