A Simple Trick to Speed Up Service Invoicing in Purchase-to-Pay

1. The service invoicing headache

For product purchases, quantity × unit price makes perfect sense.

But in services — consulting, contractors, agencies — vendor invoices often just show a total dollar amount rather than neatly listing hours × rate.

When Accounts Payable (AP) teams have to reverse-engineer that into “hours” or “days” × rate:

• It wastes time.
• It increases the chance of errors.
• It forces unnecessary back-and-forth with vendors or procurement.

2. Why this slows down the P2P process

Imagine a vendor sends an invoice for $4,750.

Your system expects:

• Quantity = number of hours
• Unit Price = hourly rate

To enter this invoice, AP has to:

1. Look up the PO or contract.
2. Identify the hourly rate.
3. Divide $4,750 by the rate to find the “quantity” (hours).
4. Enter that back into the system.

This gets even worse when:

• Partial payments are made — each instalment requires recalculating the hours for that specific payment amount.

3. The one-line fix: Unit Price = 1

Instead of forcing service invoices into a product-style structure, flip the logic:

• Set the Unit Price field to “1” for all service POs/invoices.
• Enter the total dollar amount in the Quantity field.

Example:

4. Why it works

• No conversions needed — AP can copy the total directly into the system.
• Less room for error — no incorrect quantities or rates.
• Faster approvals — dollar amounts match exactly between invoice and PO.
• Standardized process — applies across all service types, from fixed fees to milestone payments.
• Partial payment friendly — entering $2,000 now and $2,750 later is as simple as entering those amounts as the quantity for each payment, no recalculation needed.

5. Impact on the Purchase Order

Using Unit Price = 1 changes how the PO is configured and interpreted:

• PO lines represent dollar commitments rather than units of service.
• Each line can be matched to one or multiple invoices, regardless of how detailed the vendor’s invoice lines are.
• Because the “quantity” is actually the dollar value, receiving or matching is based on amounts — making partial receipts/payments straightforward.
• Procurement teams must be aware that this method breaks the traditional “units ordered vs. units received” model — you won’t see volume-based progress in the PO, only monetary progress.

6. Why it helps with the Goods/Services Receipt stage

In many service P2P processes, goods/services receipts are required before payment can be processed.
When using hours × rate:

• The receipt often requires entering the exact number of hours received for that period.
• This can force the receiver to refer back to contracts, calculate hours from totals, or coordinate with AP.

With Unit Price = 1:

• The receiver simply enters the dollar amount of the service delivered in that period as the “quantity.”
• This eliminates the need to calculate hours or match exact rates.
• For partial deliveries (e.g., phase-based projects), the receipt matches the value completed to date, making progress tracking easier for financial purposes.
• Approvals are faster because the receipt matches the same number the vendor will invoice — reducing mismatches and rework.

7. When invoice details don’t match the PO

It’s common for an invoice to have more detailed lines than the original PO.
Example:

• PO has 1 line for “Consulting Services – May” ($4,750).
• Invoice has 3 separate lines for different tasks or dates, all totalling $4,750.

With the Unit Price = 1 approach:

• AP sums the invoice lines and enters that as the “Quantity” (total dollar amount) against the PO line.
• Detailed breakdowns can be preserved using invoice attachments or description fields without altering the PO.

8. Considerations before implementing

• Loss of automated rate checking — with Unit Price = 1, the system can’t compare the billed rate to the agreed rate in the PO. You’ll need an alternate control, such as AP verifying invoice line details against the contract before approval.
• Reporting impact — if you track hours or volumes in reports, you’ll need a different field or process to capture that, since “Quantity” will now be dollar-based.
• Contract alignment — make sure POs and contracts clearly explain the logic to avoid audit issues.
• System limits — some ERP setups may have caps on quantity field sizes.
• Tax handling — ensure taxes still calculate correctly with this setup.
• Stakeholder buy-in — procurement, AP, and vendors need to understand and agree to the change.

9. Pros and Cons

10. Disclaimer note

While the “Unit Price = 1, Quantity = Total Dollar Amount” method is not widely documented in standard P2P or ERP guidelines, it has been successfully used in service-oriented organizations to reduce manual entry, simplify partial payments, speed up goods/services receipts, and align systems with real-world invoice formats. This approach should be implemented with clear documentation and cross-team agreement to avoid confusion in audits, reporting, and downstream processes.