How to Avoid Repeated Invoice Rejection in IMS? Proven Tips!

Envision this- you have worked hard, wrapped up the client assignment, got an appreciation for your work, and sent the invoice- and unexpectedly, you face invoice rejection repeatedly. 

Sounds irritating, isn’t it? 

You are not alone, there are many experiencing this! 

The stats say 25% of B2B businesses deal with invoice rejection emails or delays because of technical glitches or errors from service providers. IMS dashboards generally spot even the smallest mismatch in GSTIN, dates, purchase order numbers, etc. and flag it as an unapproved invoice. 

But here’s the catch! You can now put an end to this cycle. 

This blog will guide you through invoice rejection reasons, expert tips, and more. It doesn’t matter if you are a vendor or a freelancer; this guide is a must-read. Before you move ahead, save it for further reference. 

Let’s dive in to stop rejections! 

What is Invoice Rejection in the IMS Dashboard? Explained Clearly! 

The invoice that the vendor sends to the client after the completion of service but the recipient REJECTs in the IMS dashboard is considered a rejected invoice. The recipient performs rejection on the invoice before generating GSTR-2B due to errors between the purchase order and the submitted invoice. 

In some words, if the invoice fails in validation or is incorrect, the recipient doesn’t approve it until corrected. 

Why Your Invoice Got Rejected? 6 Issues You Need to Fix! 

You followed the process flawlessly, sent an invoice and expected timely payment. But instead, your invoice was rejected. Time to decode the real story behind it.

Scroll below to see the most common invoice rejection reasons- small mistakes that can lead to payment delays. Avoid them to ensure streamlined cash flow. 

Your Invoice Got Rejected! Now What?

Facing invoice rejection again and again? Don’t worry. It isn’t the end. It’s just the beginning of something better! 

It might feel like a setback or a rework for you. But in real, it’s an opportunity to review, rectify, revise, and resubmit the invoice with confidence. You might be wondering, how do I correct a rejected invoice? 

It doesn’t really matter why your invoice was rejected. What is truly important is- how you identify invoice rejection reasons and measures taken to correct them. 

Here’s how you can handle them swiftly and professionally to speed up your payment process. 

Read Why Your Invoice Got Rejected

The client or its finance team often mentions the invoice rejection reasons while disapproving your bill. 

Don’t skip the message, as it’s the first clue to resolve the errors. 

Highlight the Root Cause

Identify the reasons for invoice rejection. 

It can be tax computation, inaccurate data, mismatched shipping details, or the ones mentioned in the above section. 

Verify the Incorrect Entries 

Compare the PO agreement terms and conditions with invoice terms in case of discrepancies. 

If the team has flagged a mismatch in amounts, description, or dates, crosscheck it with the purchase order. 

Execute a Professional Interaction 

If the reasons are unclear, communicate with the client or his team to understand why you faced invoice rejection. 

You can also ask for feedback to avoid making mistakes again. 

Draft a Corrected Invoice 

Once you have identified errors in your unapproved invoice, correct them right away. 

Make sure all the fields have accurate data and comply with the PO agreement. 

Recheck Before Submission 

Validate all the details before resubmission, or else there is a possibility that you will face invoice rejection again. 

If possible, try to use invoicing tools to reduce human errors.

Resubmit the Invoice

Once you are done with all the edits, reshare it with the client. 

This should comply with the customer’s billing process or instructions. 

Track the Invoice Status 

Once you have shared the invoice with the client, monitor the invoice status to ensure the payment cycle doesn’t get disturbed. 

Follow up if it gets “ACCEPTED” or “PROCESSING” within the desired timeline. 

Maintain a Record of Invoice Rejection 

Document the rejected invoice, the reason, and how you resolved it. 

This strategy will help you to prevent issues in future and enhance your audit readiness. 

Enhance Your Invoicing Process 

This is your learning opportunity where you can ignore already committed mistakes. 

Update your checklists, integrate automated tools, train your teams, and follow the above steps to reduce invoice rejection rate. 

Also, Find out how to handle pending invoices in IMS

Want to View your Rejected Invoice in IMS? Follow the Below Steps!

How Do You Formally Reject an Invoice? Here’s the Rejection Email Sample! 

Subject: Invoice Rejection- [#4356: invoice number] 

Dear [Vendor Name/ Team/ Company], 

Hope you are doing well! 

I have dropped this email in reference to the [invoice number], dated [invoice date], submitted for [describe the service and products/ purchase order]. I would like to inform you that the invoice [invoice number] was rejected during the review process. 

Check out the reason for invoice rejection! 

Be specific about the reason like Incorrect GSTIN number, tax computation error, etc. 

To move ahead, we request you review the invoice, correct the errors, and resubmit it within the timeline. 

If you have any queries, we will be happy to answer them. 

Thank you for cooperating with us! 

With Regards, 

[Client name/ Team]

Read More: How to use IMS feature in Munim

Conclusion! 

Invoice rejection sounds like a roadblock, but the good news is you can deal with it easily. Whether you are a freelancer or a vendor, the above tips will help you build client trust and reduce rejected invoices. 

Handle your invoice rejection emails like a pro and speed up payment processes. 

Save the blog and revisit the checklist when your invoice gets rejected. 

FAQs on Invoice Rejection! 

1. Can someone reject an invoice? 

Yes, your client might reject an invoice due to multiple reasons like incorrect GSTIN, errors on PO, date mismatch, etc. 

2. What does it mean when an invoice is rejected? 

The vendor-facing invoice rejection means that the client has identified some errors in the bill and notified the vendor about it. 

3. What to do if an invoice is rejected? 

Amend the invoice, review it, and resend it to the client. 

4. What happens when an invoice gets rejected? 

The supplier shares the invoice in GSTR-1/ IFF, and that’s how it is visible on the IMS dashboard, too. Once it gets rejected, its market as ITC is rejected in form 2B of GST returns.