Which invoice should you check before it goes out?
Twenty-four draft invoices checked against fences built from your own billing, not from a threshold somebody guessed. One invoice at $17,400 is flagged and the $6,450 that looked wrong is not, which is the point.
Finance Intermediate Statistics free
After you install, this is the model to open.
Which Invoices Do Not Look Right?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
The answer
- Flagged
- 1 of 24 INV-3322 at $17,400, score 11.4
- The fences
- $3,175 to $7,275 built from this month's own quartiles
- Not flagged
- $6,450 the invoice that looked wrong scores 0.70
- Why it flags
- 58 hours billed, where the next largest carries 22
Twenty-four draft invoices from one month, twenty-three of them between $3,900 and $6,450 and one at $17,400. Click Run. The IQR method builds its fences from your own quartiles: anything below $3,175 or above $7,275 is suspect, and exactly one invoice comes back flagged, INV-3322 at $17,400 with a score of 11.38. The fences matter more than the flag, because they were computed from the middle of this billing run rather than from a limit someone typed once and never revisited.
The same template works unchanged on a firm whose ordinary invoice is $400 and on one whose ordinary invoice is $40,000. Read what it did not flag, too. INV-3318 at $6,450 is the largest ordinary invoice on the list and scores 0.70, comfortably inside the fence, so the eye that flinched at it was wrong. The hours billed are why the flag is worth acting on rather than overriding: the flagged invoice carries 58 hours where the next largest carries 22, which makes it a quarterly true-up rather than a keying error, and a true-up going out in the same envelope as a routine month is exactly the invoice that gets queried and paid late.
Rerun with the threshold at 3 instead of 1.5 and the fences widen to below $1,637.50 and above $8,812.50. The $17,400 still flags, which tells you it is genuinely extreme rather than marginal. IQR is the right default for billing because billing is skewed, and the z-score method would be dragged wider by the very invoice you are hunting. An outlier is either a mistake to fix or the most interesting item you own, and deleting it before you look is how both get lost. To use your own run, paste amounts into the amount column and widen the input range.
The model
It arrives on a tab called Template: Invoices That Do Not Look Right, carrying these columns:
- Invoice
- Amount ($)
- Client
- Matter type
- Hours billed
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
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Every model like this one, and the method behind them: Statistics in Google Sheets.