Invoice problems
How to read a distributor invoice (the way an auditor does)
· by the Candor team — operators auditing real restaurant invoices
A distributor invoice is a dense document designed for the distributor's accounting, not for your analysis. But every invoice answers four questions if you know where to look: what did I buy, at what real unit cost, what got added on top, and does the math check out? Here's how we read one — this is the structure our audits sort every invoice into, so you can run the same checks by hand.
The four kinds of lines
Our audit method sorts every transaction line on an invoice into one of four buckets — informational rows like subtotals, balances, and payment stubs sit outside this scheme — and sorting them is the first step:
- Item lines — the products: a SKU, a description, a pack size, a quantity, a unit price, and an extended price.
- Fee lines — charges that aren't products: fuel surcharge, delivery, small-order fees. (Fuel surcharges get their own treatment — where they follow a published diesel index, they're checkable against it.)
- Tax lines.
- Credit lines — returns, shorted items, price adjustments. Worth confirming they actually landed: a promised credit that never appears is a real loss.
When we audit an invoice, sorting its transaction lines into those four buckets is step one — because each bucket gets checked differently.
Reading an item line
Take a line like this (numbers from our own published Phoenix sample data):
SKU 123456 CHICKEN BREAST BNLS 4/10 LB 2 CS @ 128.00 256.00
Five fields matter:
- Pack size (
4/10 LB) — four 10-lb units per case. This is the field that makes or breaks every comparison, because… - The unit price (
128.00) is per case, not per pound. The real number you're paying is $128 ÷ 40 lb = $3.20/lb. Our engine normalizes every parseable line to a base unit — lb, gal, or each, with ounce packs converted to pounds — for exactly this reason: two distributors selling "chicken breast" at different case prices and pack sizes can only be compared per pound. - Quantity × unit price should equal the extended price. 2 × $128.00 = $256.00 ✓. Our engine arithmetic-checks every line this way; on paper, it's a calculator and a few minutes. Lines that don't multiply cleanly are either honest errors or adjustments that deserve an explanation — either way, worth a question.
- The SKU is your tracking handle. Same SKU, different price next month = price creep you can prove from your own paper.
- Description changes matter. If the SKU or pack changed since last order, the per-unit math needs re-doing — a case that quietly went from 4/10 LB to 4/8 LB at the same price is a per-pound increase that never looks like one.
Reading the fee lines
Total the fee lines — fuel, delivery, small-order and similar charges, leaving taxes and credits in their own buckets. Then ask of each fee: is it explained by a contract term or a published index, and did it change since last month without an obvious reason? The seven line items operators miss covers the usual suspects. Industry analysis has put typical overcharges around 1% of each invoice's total (FSR Magazine) — and fee lines are one of the places small amounts hide in plain sight.
The 15-minute version
For one invoice: sort the transaction lines into the four buckets → convert your top items to per-unit prices → spot-check the multiplication on the biggest lines → total the fee lines (taxes stay their own bucket, and credits get checked for having actually landed rather than totaled as costs). That's the core of what a professional read does, minus one thing you can't do alone: knowing whether your per-unit numbers are high — which takes a reference point beyond your own paper.
That reference point is the part we sell, so read this knowing that: email your last 3 invoices and the free top-3 benchmark comes back within 48 hours, your per-unit prices set against prices other operators have paid or been quoted — every finding tied to the specific invoices it came from — invoice number and date, plus the SKU on item findings where your invoice lists one. No citation, no claim. And if you'd rather keep it fully DIY, the full self-audit method is free and takes about an hour.