Invoice Matching: Everything You Need to Know

December 11, 2023
Everything You Need to Know About Invoice Matching
Share article

Invoice matching is a key part of the Accounts Payable process. Traditional approaches in this key task may cost time, effort, and human resources to a business. Using innovative technologies and automation can optimise invoice matching to provide extra leverage and value to a business. Learn more about why invoice matching is important for financial operations and how Kloo integrates AI and smart automation to streamline your invoice matching processes.

What is Invoice Matching? 

Invoice matching is an accounts payable process that validates & compares information on the purchase order (PO) with that of the vendor invoice and product receipts. 

When an organization wants to use the goods or services of a vendor, it raises a purchase order with detailed requirements. Upon delivery of the requisitioned goods or services, a product receipt is issued by the buying organization. The vendor then raises the invoice for payment clearance. This is when invoice matching takes place. 

Matching invoices ensures that there are no errors or inconsistencies between the PO and the invoice. It facilitates faster settlement of vendor dues and prevents the risk of vendor fraud & payment for fraudulent invoices. 

Why is Invoice Matching Important? 

Let’s find out why verifying or matching invoices is so important for a business. 

Invoice matching ensures that vendor invoices can be verified against supporting documents before releasing payments. This helps businesses across a variety of functions, including: 

  • Confirming that payments are made only for valid goods or services received from the vendor 
  • Maintaining faster and accurate releases of payments 
  • Facilitating better transparency by eliminating errors and double payments 
  • Tracking records of payments for multiple vendors 
  • Ensuring preparedness for company audits 

Different businesses can follow different ways of invoice matching as elaborated in the next section below. 

How to Automate Invoice Matching 

Automated invoice matching refers to digitising a company’s invoice matching process with the help of advanced tools and technology; invoices are processed automatically without the need for human intervention. 

Automated invoice matching technology can change the way AP departments work. Invoices received are scanned, converted to a digital form, matched using algorithms, and checked against tolerance settings, and if approved, are processed for payment -- all without human dependency. 

The task of validating or matching invoices and processing them using automation can provide a host of benefits. AI-driven automation technologies such as OCR and RPA can enhance touchless invoice processing to be efficient and error-free. 

How Kloo Automates Invoice Matching 

Kloo delivers AI-powered automation for Accounts Payable for invoice matching and processing. By leveraging AI and OCR technology to extract and store invoice data on the platform, your finance team saves valuable time and is guaranteed accuracy with automated PO matching and a customisable approvals engine. 

Here’s how Kloo automates invoice matching: 

  1. Effortless invoice import: Submit invoices onto the platform via email or direct upload and store them in their respective vendor portal. 
  1. Touchless invoice processing & data extraction: Kloo's built-in OCR technology scans your invoices and automatically extracts data and pre-populates them in the platform. If you make changes during your review, Kloo will apply your logic to future invoices. 
  1. Automate PO and invoice matching: Kloo directly matches POs to invoices and receipts. Streamline your purchasing policies by setting custom rules to determine when invoices should be automatically matched or when manual matching is required. 

Benefits of Automated Invoice Matching 

Automating invoice matching helps with the easier processing of invoices for payments. With the need for human intervention eliminated, the complications of maintaining paperwork and manual validations are also ruled out. 

Some of the notable benefits offered by touchless invoice processing are: 

  • Time-saving: Manual invoice matching is tedious and time-consuming. Checking invoice details individually and validating with 2,3, or 4-way processes takes a considerable amount of time. Hence, it allows company employees to dedicate their valuable time to other key tasks and improve overall productivity. 
  • Accuracy: Automating the AP process reduces the incidence of errors and ensures a smooth workflow between processes. Mismatches or discrepancies are detected easily and only when an invoice is cleared at all levels, it is scheduled for payment. 
  • Protection against duplicate and fraudulent invoices: Automating invoice matching entails consistent validation between invoices and supporting documents. Any exceptions too are detected and flagged for manual verification. This ensures protection against fraudulent or duplicate invoices and better business control. 
  • Promotes vendor relationships: Automating invoice processing can quickly match invoices with purchase orders and expedite faster payment to vendors to keep them satisfied. In turn, the business can also benefit from better contract offers and early payment discounts for increased profitability. 
  • Efficient cost analysis: Touchless invoice processing provides information on individual line items that helps to identify the ones offering the highest value. This reliable data helps in better cost analysis and selection of relevant vendors to bring in more value to the company. 
  • Good for audits: Invoices with other supporting documents are mandatory for audits. Using automated invoice matching ensures purchase orders, goods receipts, inspection slips, and invoices are available in a digitally centralized location that can be accessed easily during audits to expedite the process. 

Invoice matching and processing is a complex process. AI-enabled technology can provide leverage to businesses through customisable automation functions. By automating, companies can look to seamlessly integrate document management workflow processes, create better transparency, maintain better business relationships for optimised business efficiency and growth.

Take a Tour of Kloo

Take an interactive tour of Kloo below to view our AI-powered solutions for invoice matching.

 

Let's get started

img-044-1920x998-1