Accounting in companies is one of the key aspects. Both for the companies’ own benefit and for legal reasons, every financial movement should be correctly justified. In this article, we will talk about one of the key elements to carry out the control of expenses. This is the proof of payment. We will see what it is, what it is for and what information it should provide. Read on.
Table of Contents
1. What is a proof of payment?
Many employees have to make purchases and payments because of their work obligations. In many cases, it is the employees themselves who advance the money for payment and when they report it to the company, the money is reimbursed to them.
In order for this to be controlled by the company’s financial department, the payment must be justified and this process is possible thanks to the payment voucher.
In short, the proof of payment is the reliable proof that a payment has been made by an employee of the company and to be able to claim the refund of the money that has been spent, provided that it is a forward by the employee, or simply that this expense is correctly justified in the company’s accounts.
2. What is a proof of payment for?
As we have seen above, a proof of payment serves to give value and credibility to a payment.
Although we focus on the professional sphere, every day, outside our workplace, we also make payments and receive a proof of payment, which we usually discard out of hand.
On the other hand, companies are obliged to keep all receipts in order to be able to prove to the relevant authorities that the company’s money is being used correctly.
3. How is a proof of payment managed?
All companies must have a good expense control system. This process is essential to balance the accounts before the public administration and before the company itself.
Transparency of accounts should be a priority for companies, but sometimes it is difficult to achieve, especially when you depend on so much information. For each payment, you have to keep the corresponding proof of payment, which means that you have to keep a large amount of documents.
On the other hand, despite being an obligation by law, the management of payment receipts serves to avoid potential problems. Later on, we will talk about the technological solutions that make it possible to store any proof of payment digitally and automate the process, since, if the management is done manually, in addition to being susceptible to errors, it can be a very tedious task.
4. What information does a proof of payment contain?
In general, a payment receipt must contain essential information in order to be considered valid. In the past, a proof of payment used to be provided on paper. Nowadays, this procedure has changed and they can be submitted in electronic format and remain valid, as long as they are approved by the Tax Agency.
The information that a proof of payment must contain is as follows:
- The name of the company selling the product or service.
- The date on which the payment was made.
- The concept for which the payment has been made.
- The amount of the payment excluding tax.
- The amount including VAT.
- Sometimes, the name of the company and of the employee making the payment is displayed.
5. Difference between proof of payment and invoice
Earlier, we mentioned the importance of good expense management by companies. We have focused on the figure of the proof of payment, but there are other means that should be taken into account. One of them is the invoice, which is often confused with the proof of payment. Let’s look at the difference between the two concepts.
An invoice is a document indicating the purchase or sale of a product or service by one company to another. Despite the fact that the vast majority of items appear to be justified, invoices do not indicate whether payment has been made. This is why it is necessary for invoices to be correctly noted as paid, partially paid or not paid.
The proof of payment, as we have seen so far, is the element that complements the invoice and justifies the payment. It also provides all the information necessary for the expense to be reimbursed to the employee, if applicable.
Finally, there is another element that can sometimes be accepted as proof of payment, which is the receipt issued after a card payment. The main problem is that these receipts do not contain all the information about the expense, so they must be accompanied by a receipt from the company that has offered its products or services.
6. Digitise the proof of payment
Earlier, we discussed the importance of keeping all payment receipts. We have also indicated the different ways to keep these receipts. The most common way, so far, is to keep documents, such as receipts or invoices, on paper. However, as in many other aspects, technology is taking on a more prominent role.
In order to avoid losing documents, either by mistake or due to their deterioration, companies are increasingly investing in the implementation of technological solutions and tools that promote the digitisation and automation of expense management processes, including the management of payment receipts.
Solutions such as Tickelia are the necessary tool to fully manage the flow of payments for companies. Whether it is a payment receipt for per diems, mileage or a purchase of material, Tickelia offers the possibility of digitising the documents through a photograph taken with the employee’s own mobile phone.
Thanks to the OCR ICR technology, capable of recognising up to 18 fields of information, it is possible to digitise the receipts and get rid of paper receipts.
Tickelia is approved by the Tax Agency, so the photographs of the receipts maintain the legal validity of the physical document itself.
Tickelia offers the possibility of being used through its App and computer software, so it can be used from any device. It also offers different modules for complete control, such as expense reporting, travel management, advance payment management and VAT recovery, among many others.
Finally, Tickelia is 100% integrable with other solutions such as ERP and CRM management software, payroll or travel agency software.
If you want to know everything Tickelia has to offer, request a demo by clicking on the banner!