How should a medical store handle supplier invoices and payments to ensure accuracy and timeliness?

• A. Match invoices with purchase orders and goods receipt notes; verify quantities and prices; obtain approvals; process payments; retain records and resolve discrepancies
• B. Pay invoices immediately without verification
• C. Record invoices without POs
• D. Process payments in bulk at year-end

Answer: (A)

The main concept is implementing strong accounts payable controls through three-way matching to ensure accuracy and timely payments. In practice, this means each supplier invoice should be compared to the corresponding purchase order and the goods receipt note to confirm that the items delivered, their quantities, and the unit prices match what was ordered and what was billed. This match catches discrepancies such as wrong quantities, price changes, or missing items before any payment is made.

Verifying quantities and prices is essential to avoid paying for goods that weren’t received or were billed incorrectly, and it helps ensure that taxes, discounts, freight, and any contract terms are correctly applied. Obtaining proper approvals adds a layer of governance, ensuring that payments are authorized by the right people and that duties are separated to reduce the risk of errors or fraud.

Payments should be processed promptly after verification and approval to maintain good supplier relationships and to take advantage of any early-payment discounts, while also preserving a clear record trail for audits. Keeping complete records and resolving any discrepancies before finalizing payment supports accurate financial reporting and reliable inventory records, which are critical in a medical store where stock levels directly affect patient care and compliance with regulations.

Choices that skip verification, omit the three-way match, or postpone payments to year-end undermine accuracy, control, and supplier terms. Paying immediately without checks risks overpayment or fraud; recording without a purchase order removes essential controls; bulk year-end payments can violate terms and disrupt supply.