Payment and Invoicing Procedures

Payment and Invoicing Procedures

Payment and Invoicing Procedures

This section provides a comprehensive guide on BEC Arabia's payment and invoicing procedures for subcontractors and suppliers. It is strategically important as it ensures smooth financial transactions, maintains a healthy cash flow, and upholds BEC Arabia's reputation for professionalism and efficiency.

Procedures

1. Invoice Submission: Subcontractors and suppliers should submit their invoices to the Finance Department within the first week of each month.

2. Invoice Verification: The Finance Department verifies the invoice details against the purchase order or contract.

3. Approval: If the invoice is accurate, it is approved by the Finance Manager and forwarded to the Accounts Payable Department.

4. Payment Processing: The Accounts Payable Department processes the payment within the agreed payment terms.

5. Payment Confirmation: A payment confirmation is sent to the subcontractor or supplier.

Examples

• If a subcontractor submits an invoice on the 3rd of the month, the payment should be processed by the 17th of the month (assuming a 14-day payment term).

• If a supplier submits an invoice on the 5th of the month, the payment should be processed by the 19th of the month (assuming a 14-day payment term).

Compliance and Regulations

These procedures align with KSA laws, BEC Arabia’s internal compliance policies, and international construction standards. They ensure:

• Compliance with KSA's prompt payment regulations.

• Adherence to BEC Arabia's internal financial controls and audit requirements.

• Alignment with international best practices for payment and invoicing in the construction industry.

Metrics and KPIs

• Invoice Processing Time: The time taken from invoice submission to payment processing. The target is to keep this within the agreed payment terms.

• Invoice Accuracy Rate: The percentage of invoices that are accurate and do not require any corrections. The target is to achieve a rate of 95% or higher.

• Payment Confirmation Rate: The percentage of payments that are confirmed with the subcontractor or supplier. The target is to achieve a rate of 100%.

Collaboration

• The Finance Department, Accounts Payable Department, and the subcontractors/suppliers play crucial roles in these procedures.

• The Finance Department is responsible for invoice verification and approval.

• The Accounts Payable Department is responsible for payment processing.

• The subcontractors/suppliers are responsible for timely invoice submission and providing accurate invoice details.

Additional Notes and Templates

• Always use BEC Arabia's standard invoice template for invoice submission.

• Ensure all invoice details are accurate to avoid delays in payment processing.

• Regularly review and update these procedures to ensure they remain effective and efficient.

• Refer to BEC Arabia's 'Finance Policies and Procedures Manual' for more information.