How to check a supplier invoice: a 5-step checklist
To check a supplier invoice, work through five things in order: it's a valid tax invoice, the maths holds, each price is the one you agreed, the charges on top were agreed too, and you haven't been billed for it already. Most invoices pass. A fixed order finds the few that don't without reading every line of every one by hand.
In short
- Five steps, in order: a valid tax invoice, the maths, each price against what you agreed, the charges on top, and whether you've been billed for it already.
- The price check is where overcharges show up: hold each unit price against the schedule of rates or quote in force on the invoice date, in the unit agreed.
- When a step fails, ask the supplier before you pay, with evidence they can check: the agreed price list, the docket or the earlier invoice.
Supplier invoice, bill, statement, payment claim or docket?
A supplier invoice is the supplier's request to be paid for goods or services they've given you. To the supplier it's a sale; in your books it's a bill, the same document seen from the paying side. The other papers that arrive with it do different jobs:
- A tax invoice is a supplier invoice that also meets the ATO's requirements, which is what lets a GST-registered business claim the GST on it.(ATO: Tax invoices)
- A statement lists the invoices and payments on your account over a period. Pay from the invoices, and use the statement to spot one you haven't seen.
- A delivery docket records what arrived, signed on site. It's what the invoice's quantities are checked against.
- A quote or a price list is the price agreed before the work. It's what the invoice's prices are checked against.
- A payment claim is different. Each state and territory has security of payment laws, and in most of them a contractor in building and construction can issue a payment claim, which gives the party paying a strict timeframe to respond. If an invoice comes as a payment claim, deal with it within that timeframe, and check the law where the work was done.(business.gov.au: Laws affecting contracts)
A supplier invoice, annotated
A made-up builders' supplies invoice from "Sample Building Supplies", dated 12 August 2026, with what to check on each line. Every figure is invented to show the arithmetic; none is a market price.
Its total is over $1,000, so as a tax invoice it has to show your business's name or ABN as well as the supplier's.(ATO: Tax invoices)
| On the invoice | Qty | Price | Total | What to check |
|---|---|---|---|---|
| Tax invoice SAMPLE-1042, supplier's ABN, date, your business name | Qty: | Price: | Total: | What to check: Step 1: a valid tax invoice. Over $1,000, so it has to name you or show your ABN. |
| 90x45 MGP10 pine framing | Qty: 120 m | Price: $6.20 | Total: $744.00 | What to check: Step 3: the rate you agreed per metre, in force on 12 August, and billed per metre, not per length. |
| 16mm plasterboard 2400x1200 | Qty: 30 sheets | Price: $21.50 | Total: $645.00 | What to check: Step 3: the agreed rate for this sheet size, and 30 sheets on the delivery docket. |
| Delivery | Qty: 1 | Price: $85.00 | Total: $85.00 | What to check: Step 4: a delivery charge you agreed, for a delivery that happened. |
| Fuel levy 3% of goods | Qty: | Price: | Total: $41.67 | What to check: Step 4: an agreed levy, at the agreed rate, on the agreed base (here the goods only). |
| Subtotal, GST, total | Qty: | Price: | Total: $1,515.67, $151.57, $1,667.24 | What to check: Step 2: the lines add to the subtotal, and GST is no more than ten per cent of it. |
| Invoice number and amount | Qty: | Price: | Total: | What to check: Step 5: not already paid under the same number, or the same amount and date. |
Step 1: Is it a valid tax invoice?
Before anything else: is it a tax invoice at all, with the supplier's ABN, the date, the items and the GST? For $1,000 or more it also needs your business's name or ABN. Without these you can't claim the GST credit, and the time to ask for a corrected one is before you pay.(ATO: Tax invoices; ATO: When you can claim a GST credit)
For a supplier you haven't paid before, look the ABN up on ABN Lookup: it should be active, and registered for GST if the invoice charges GST.(ABR: ABN Lookup)
Step 2: Does the maths hold?
Quantity times unit price should equal each line's total, the lines should sum to the subtotal, and the subtotal plus GST should equal the total. On the annotated invoice above:
quantity × price = line total120 × 6.20 = 744.00 line totals together = subtotal744.00 + 645.00 + 85.00 + 41.67 = 1,515.67 subtotal + GST = total1,515.67 + 151.57 = 1,667.24When they disagree, check your reading of the invoice before you blame the supplier: a misread figure on a scan is more common than a supplier's sum being wrong.
Step 3: Is each price the one you agreed?
This is where the money is. Hold each line's unit price against the schedule of rates or quote you agreed with that supplier, in force on the invoice date: a new price list that starts next month doesn't apply to this month's invoice. Check the unit as well as the price. A price per metre billed per length, or per bag billed per pallet, changes the total a lot without looking wrong.
Check the quantities against the delivery dockets or the work actually done while you're there. If you have no written schedule, the prices you've already paid the supplier are the next best reference, and the schedule of rates guide covers building one from them.
Step 4: Were the charges on top agreed?
Freight and delivery, fuel levies, waiting time, minimum-load and small-order fees, pallet deposits and card surcharges are easy to miss because they aren't the goods. Each should be one you agreed, at the agreed amount or percentage, worked out on the agreed base, and billed only for the deliveries that happened. A charge you never agreed is worth a question, however small.
Step 5: Have you been billed for it already?
A resent invoice looks exactly like a new one. Look for the same supplier and invoice number, or the same amount and date, in what you've already paid, and for a delivery docket that has already been billed. The duplicate invoices guide goes through the common ways it happens.
When an invoice fails a step
Ask the supplier before you pay, with the evidence they can check: the agreed price list and its date, the docket, or the earlier invoice. Most suppliers fix a slip quickly while the invoice is unpaid. For an amount you dispute, many businesses pay the rest and keep back only that amount, telling the supplier in writing what and why; the credit notes guide covers getting it back.
Keep the records
The ATO generally asks businesses to keep their records for five years, and some records for longer. Keep the invoice as you received it, and a note of anything you queried and how it was settled.(ATO: Overview of record-keeping rules for business)
Doing it with CostCode
CostCode is supplier invoice checking software that runs these five steps on every invoice you upload. It first checks its reading reconciles with the invoice's own total, and sends anything that doesn't to your team to look at rather than to the supplier. Then it checks the tax-invoice basics (an ABN printed, GST no more than ten per cent), each line against the price list in force on the invoice date and in the unit agreed, each charge against the charges you agreed with that supplier, and whether you've been sent the same invoice before.
A line it has nothing to check against shows as unverified with the reason, never as passed, and nothing goes to a supplier unless someone in your team presses send. The free check on this site runs the steps that need no account on one invoice.
Questions
What is a supplier invoice?
The document a supplier sends asking to be paid for goods or services they've given you. In your books it's a bill. If you're registered for GST, you need it to be a valid tax invoice to claim the GST on a purchase over $82.50.(ATO: When you can claim a GST credit)
What's the most valuable check?
Comparing each unit price, and each charge on top, with what you agreed. The paperwork checks protect your GST credit; the price check is where overcharges show up.
Should I query a supplier as soon as the numbers look wrong?
Check your own reading first. On a scanned or photographed invoice, a misread figure is more common than a supplier's arithmetic being wrong.
How long should we keep supplier invoices?
The ATO generally asks businesses to keep records for five years, and some for longer. Check the ATO's record-keeping rules for your situation.(ATO: Overview of record-keeping rules for business)