What is Invoice Matching?
Invoice matching involves comparing and linking a supplier invoice with the underlying data on which the cost is based – a purchase order and goods delivery receipt (GDR), or a contract.
Matching purchase orders to invoices
Manually matching invoices to purchase orders and goods deliver receipt is complex and time-consuming. Especially when it requires matching invoices to purchase orders at the line level. An AP invoice automation solution can handle a large part of the invoice matching process so that the invoice is processed in a fully automatic workflow – completely touchless.
What happens when an invoice does not match the purchase order?
When the information on the invoice does not match purchase order underlying data, a deviation occurs. This deviation must be reviewed and handled by the person within the organization who is responsible for the purchase in question. In many cases, this can be a complex and tedious task. Here's how accounts payable software can simplify and streamline the process by automatically identifying deviations and sending only the specific invoice lines to the right person for review and a decision.
Different levels of automated invoice matching
There are different levels of automated invoice matching. These refer to the number of supporting documents an invoice is matched against in the invoice matching process.
- 2-way invoice matching verifies that the invoice match the corresponding purchase order
- 3-way invoice matching verifies that the invoice match both the purchase order and the receipt of the goods
- 4-way invoice matching adds another criterion to verify that the invoice details also match the acceptance or inspection document in the case this step is part of the purchasing process
Most companies use 3-way invoice matching. It is essential to understand that to enable automated 3-way invoice matching you need to ensure that master data, including vendor ledgers, purchase order details and goods receipts, can synchronize seamlessly between the ERP system and the AP automation solution.