Before you file a supplier invoice, check that it proves what you bought

A receipt proves you paid; an invoice may need to prove much more

When you buy inventory from a wholesaler, distributor or liquidator, the document you receive does two jobs. It is your record of the purchase for your books. On some marketplaces, it can also be the evidence you submit when a category or brand requires proof of where your stock came from. A crumpled register receipt might do the first job but fail the second.

This guide covers what to check on a supplier invoice before you rely on it, and how to keep inventory documents organized so you can find them when someone asks.

Step 1: Know the difference between the documents

The IRS lists invoices, credit card receipts and statements, cash register tapes and canceled checks as purchase documents, and says supporting documents should identify the payee, the amount paid, proof of payment, the date and a description of the item. It also notes that a combination of documents may be needed to support all of those elements. For a wholesale purchase, that usually means keeping the invoice and the proof that you paid it.

Step 2: Check the fields before you file it

A useful supplier invoice for a reseller generally includes:

1. The supplier's full business name, address and contact details.
2. Your name or business name and address, matching your selling account where relevant.
3. An invoice number and invoice date.
4. Item descriptions specific enough to match the products you list, such as brand, model and size.
5. Quantities and unit prices.
6. Totals, taxes and shipping charges.
7. Payment terms and method.

If a marketplace has its own documentation rules for a category, read them for that category. Requirements differ between platforms, and some specify how recent an invoice must be, what quantities it must show or whether retail receipts are accepted. Check the current rule rather than relying on a general list.

Red flag: An invoice with no supplier address, no phone number, vague items such as "assorted merchandise," or a supplier who cannot be found anywhere else is weak evidence. Do not edit, recreate or "tidy up" an invoice. Altering a document you submit is a far bigger problem than a declined application.

Step 3: Vet the supplier before the first order

An invoice cannot be better than the business that issued it. Before buying, look for a verifiable business address, a working phone line, consistent company details across its website and documents, and terms you can read before you pay. Ask whether they are an authorized distributor for the brands they sell if authorization matters on your marketplace. Start with a small order and check that the invoice and goods match what was promised.

Step 4: Match invoices to inventory

An invoice is most useful when you can connect it to the exact stock on your shelf. A simple system works:

• Give each invoice a short reference, such as the supplier initials and invoice number.
• Record that reference against every unit or lot in your inventory sheet.
• Note the per-unit cost, including a fair share of inbound shipping if you choose to allocate it.
• Store the invoice, the proof of payment and any correspondence together.

In this chosen example, an invoice lists 12 units at $15 each with $24 of inbound shipping. That is $180 of goods and $204 in total, or $17 per unit if you spread the shipping evenly across all 12. Record both figures so your per-unit cost is not understated.

Step 5: Keep documents long enough

The IRS says the length of time you should keep a document depends on what it records, and that records supporting an item of income or deduction should generally be kept until the period of limitations for that return runs out. Keep inventory invoices at least that long, and longer for anything you may still be holding. A scanned copy filed by year and supplier is easier to search than a shoebox. If a purchase receipt is missing, the missing purchase receipts guide covers what you can still do.

Common mistakes

• Treating a packing list as a priced invoice.
• Buying from a supplier whose details cannot be verified.
• Losing the link between an invoice and the units it covers.
• Assuming one marketplace's document rules apply on another.
• Keeping the invoice but not the proof of payment.

The test for any invoice

Could a stranger match this document to a real supplier, a real payment and the exact items on your shelf? If not, fix the record before you need it.