Supplier Invoice Approval in a Two-Person Business

In a small business the same person orders, receives, approves and pays - and that works until the day you pay the same invoice twice, or pay for something that never arrived. Control in a two-person business is not bureaucracy but three simple rules you can apply with no system and without slowing anything down.

What do you check before paying a supplier?

Those three questions catch almost every problem: an invoice for something never ordered, an invoice for a delivery that never arrived, and an invoice at a price different from what was agreed. In a small business they take a minute, because whoever checks usually remembers.

How this works when two people do everything

Full separation is impossible, so you do partial separation:

• Whoever ordered marks it received. Not whoever pays.
• Whoever pays marks it paid. Not whoever ordered.
• Above a certain amount, both. A WhatsApp message will do; no form needed.
• Recurring payments are reviewed quarterly rather than monthly.

The third line is the right compromise: not every invoice needs two approvals, but above an amount that hurts, yes. The amount itself depends on the size of the business; what matters is that it is defined.

How to prevent double payments

This is the most common failure, and it happens three ways:

1. The invoice arrived twice - by email and by post, or from the supplier and from a contact.
2. It was paid and not marked, so somebody paid again.
3. A forgotten partial payment completed twice.

Prevention is simple: mark every invoice as paid, immediately, in the same place it is stored. The marking can be a "paid" folder, a filename change, or a field in a system - what matters is that there is one and everybody uses it.

Where to keep supplier invoices

One folder, organised by month, with filenames including supplier and date. It is not sophisticated and it works. What does not work:

• An email inbox, because whatever did not arrive by email never gets there.
• A folder per supplier, because then you cannot see a whole month.
• Photos on somebody's phone, because they never reach anyone else.

The more modern route is capturing into a system, and some Israeli systems offer convenient intake channels - SUMIT, for example, presents document submission from desktop, mobile, email or a WhatsApp bot. Full detail in capturing supplier receipts.

What to do when something does not add up

• An invoice for something never ordered: do not pay before checking. Usually a supplier error.
• A price different from the agreement: contact the supplier before paying, not after. After payment it becomes a credit request.
• A duplicate invoice: mark it and tell the supplier, so it does not recur.
• An old invoice that resurfaces: check whether it was paid, and only then decide.

In all four, the rule is the same: clarify before paying. Once the money has left, the negotiation starts from a worse position.

What to review quarterly

Recurring payments are where money leaks quietly: a subscription you never cancelled, a service no longer used, or a supplier who raised a price without telling you. Fifteen minutes a quarter on the recurring payments list usually finds at least one - which is enough to justify the time.

What this actually saves

A business applying the three rules usually finds three things in the first months: one invoice that arrived twice and was not paid twice; one supplier who raised a price without telling anyone; and one recurring payment that should have stopped. Those three discoveries together repay the time invested several times over - which is why control in a small business is not risk management but simply saving money.

Where the process usually stalls

Not in the rules but in the marking. Everybody agrees to check before paying, and within a month somebody pays without marking because they were in a hurry. The way to hold it: make the marking part of the payment rather than a step after it - the same screen, the same minute. A control requiring an extra action after the money has gone is a control that will stop happening.

What to keep, and for how long

Supplier invoices are part of the material that gets retained, and how long is set by the rules applying to your business - a question for your accountant. What is operationally true: decide on one place and one period, rather than leaving each person to keep things as they see fit. The broader archive subject is covered in digital archives and document retention, and the principle is simple: what is not in one place is not anywhere.

What about regular suppliers

A supplier invoicing you every month is a different case: there is no point checking an order each time, because the agreement is the order. What you do need:

• Check the amount matches the agreement, not merely that it resembles last month.
• Watch for price rises arriving without notice - more common than people think.
• Check quarterly that the service is still in use. A forgotten regular supplier is the quietest expense there is.
• Confirm the commitment is still relevant, and when it renews.

The last item surprises people: many agreements renew automatically, and the moment to cancel is before renewal rather than after.

How this changes when a third person joins

Once there are three people, define roles rather than only rules: who may order and up to what amount, who confirms receipt, and who makes payments. It still needs no system - one table is enough - but it does need writing down, because with three people the assumption that everybody knows stops being true. It is also the moment to set an amount ceiling requiring approval, as described in supplier invoice approval through to Masav payment.

Sources

• SUMIT - document and expense submission
• Morning - expense management
• Israel Tax Authority - Israeli invoices