VERIFYING THE ACCURACY AND VALIDITY OF INVOICES - 8422.050

(New: 10/2020)

 Purpose of an Invoice

An invoice is a document issued by a supplier showing the invoice date, good/service, quantity, price, terms, nature of delivery, and other particulars of goods sold or of services rendered. All invoices should be processed using the State of California’s standard payment terms unless a discount is offered. Payments should generally be made within 45 days of the receipt date. State agencies/departments shall pay penalties if a correct claim is not submitted to the Controller within 30 calendar days and payment is not issued within 45 calendar days.  An invoice is a legally binding agreement showing both parties’ consent to the quoted price and payment conditions (e.g., Net 30, 5% Discount).  Invoices provide the following additional benefits:

 

• Maintaining Records - Provides a record of when goods or services were rendered, the recipient, and where and when the goods or services were received.
• Payment Tracking –Keeps track of payments and amounts owed for both the seller and the buyer.
• Legal Protection – Provides legal proof of an agreement between the buyer and seller.
• Receipting – Provides the date, the goods or service received.

 

Requirements for a Valid Invoice

State agencies/departments should determine that all invoices are valid, correct, and comply with California Code of Regulations, title 2, division 2, chapter 1, article 7, section 677 before submission to the SCO for payment.  Agencies/departments will determine that:

 

1. Invoices that are not printed on business letterhead shall be signed by the vendor or person furnishing the goods or service.
2. The invoice must be properly itemized with the information listed below.
   • Accurate billing address as stated on the purchase order or contract
   • Supplier Invoice number
   • Invoice date
   • Company name and remittance address
   • Payment terms offered
   • Sales tax and or use tax
3. Goods or services invoiced have been received or provided, as evidenced by stock received reports or similar documents or staff verification.
4. Payment has not previously been made (this may be accomplished by referring to the agency’s/department's remittance advice file or other departmental records).
   
5. Invoices comply with provisions of purchase orders, contracts, leases, service agreements, grants, etc.
6. Cash discounts have been taken, if applicable.
7. Authority exists to obtain the goods or services.
8. Freight charges of more than $50 must have supporting prepaid freight bills included in the claim to the SCO. 
9. Freight charges of more than $500 have been approved by the Department of General Services (DGS), Transportation Management Unit (TMU) (see SAM section 3852 and State Contracting Manual FI$Cal Chapter 8 Topic 6 8.A6.1).
10. All invoices for goods sold to and services provided to the state shall be billed to the State of California or a particular agency/department.
11.  Invoices for purchases charged to a prior fiscal year appropriation in which the delivery is received in the current fiscal year will need to be noted “ordered in prior fiscal year for immediate delivery.”