What is invoice matching?

Invoice matching is a critical process ensuring accuracy in payments by cross-referencing invoices with relevant documents before approval. It verifies payment amounts, validates goods received, and maintains precise supplier payment records.

Matching invoices to purchase orders

Commonly referred to as purchase order (PO) matching, this process compares invoices with POs or other relevant documents like goods delivery receipts (GDRs) or contracts. Suppliers vary in billing frequency and format, complicating the reconciliation process. Each item on an invoice must align with corresponding entries on the PO, GDR, or contract, demanding meticulous attention from the Accounts Payable team.

Elements Verified in Invoice Matching

Invoice matching involves checking key data between an invoice and another document, including:

  • Supplier and recipient names
  • Description of goods or services
  • Quantity and value of orders
  • Delivery dates

What is invoice matching deviation?

Invoice matching deviation indicates any disparities between the invoice and associated documents, prompting further investigation by Accounts Payable. Resolving these discrepancies involves coordination with purchasing managers to determine the correct information and subsequent actions, a process that can be time-consuming.

The role of automated invoice matching

Automated invoice matching streamlines the reconciliation process, reducing the risk of human error and saving valuable time. Leveraging intelligent algorithms, automated systems match invoices digitally with relevant documents.

Different levels of automated invoice matching

There are three levels of automated invoice matching:

  • 2-way matching compares invoices with purchase orders
  • 3-way matching adds verification against goods receipts to the comparison
  • 4-way matching includes inspection or acceptance documents in addition to POs and goods receipts

Of these, 3-way matching is the most widely adopted method. Seamless integration of vendor ledgers, purchase orders, and goods receipts between automation solutions and ERP systems is crucial for successful automated 3-way matching.

Learn more about invoice matching

To discover how Basware AP Automation can optimize your invoice matching processes, reach out to our team. Alternatively, explore our comprehensive AP Automation guides for further insights.