As a finance manager, you’re likely struggling with inefficient invoice matching and fragmented cash flow management. Raise your hand if any of the statements below relate:
Still, every billed item needs to match what was ordered and received. The good news is that there is a way to speed up the process and even automate it.
In this article, you'll learn all about invoice matching: Including the types, how it works, and the benefits of automating it. You'll also discover how Juni gives you full visibility and control over business finances, so you can put an end to manual processes.
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Invoice matching is the process of comparing invoices with supporting documents such as purchase orders and delivery notes. This is how companies verify all information is correct before making a payment.
There are three different types of invoice matching: two-way matching, three-way matching, and four-way matching. Which process gets used depends on the risk of discrepancies and the level of complexity of each transaction.
Two-way matching (also known as 2-way matching) is typically used for simple and straightforward transactions. This type of matching compares the purchase order to the invoice.
For example, if the company’s office manager buys printing paper for the office, the purchase order might indicate an order of 50 packs of paper at the cost of 500 EUR. Accounts payable (AP) department needs to verify that the invoice indeed lists a charge of 500 EUR for 50 packs of printing paper.
In other words, if quantity and total cost match, the payment is good to go.
Three-way matching (also known as 3-way matching) compares the purchase order, invoice, and the receipt. It’s most commonly used in procurement to ensure that what was ordered and received matches the items and amount billed.
Let’s say your IT department orders 10 servers from a certain supplier. Each server costs 5,000 EUR. The servers get delivered and you receive an invoice for 50,000 EUR.
Before processing the payment, you would compare three things: items and amount stated on the purchase order, delivery note or the goods receipt, and the invoice. If all three documents align, the payment can be released.
Four-way matching (or 4-way matching) compares the purchase order, delivery note or the goods receipt, inspection report and invoice. This process is used when it’s important to do quality control. Think procurement of high-value items in manufacturing or enterprise-level software services.
In the latter case, four-way matching ensures that the software was delivered, all agreed services completed, but also that the software meets the agreed quality requirements (inspection). Only then can the invoice be paid.
So, what does invoice matching look like in practice? Let’s analyse five key steps:
Firstly, you need to receive the invoice. In most cases it comes either through email in a PDF format or directly into your accounting software. It can also come in the form of an actual physical invoice via mail. In that case, it needs to be scanned into a digital format.
Did you know you can reconcile receipts 2x faster? Learn more about Juni's smart receipt matching.
After you receive the invoice, the data gets automatically captured and parsed by your accounting software. Best practice is to have predefined templates that can identify and extract data from received invoices.
If you’re scanning a physical invoice, you would need a solid Optical Character Recognition (OCR) software that can extract relevant data such as invoice number and date, the amount, supplier name, registration number, etc.
Today, different AI solutions are used for invoice processing which significantly reduces errors. Regardless of the method of data extraction, it’s your responsibility to make sure all the data is correct, complete, and in the right format. In some cases, you might need to do some manual data entry.
After you verify all the data is there, it’s time to start the invoice matching process. Some parts of the process are universal whether you’re using 2-way invoice matching, 3-way matching, or 4-way matching.
Here's how to verify if the invoice aligns with relevant supporting documents:
Human errors happen so sometimes you might notice discrepancies. In this case, either you or another representative of the AP department, needs to investigate what happened. This requires talking with your team and the supplier.
It’s best not to jump to conclusions. Try to assume good intentions and protect supplier relationships. However, if it turns out you can’t resolve the issue or that the vendor is not cooperating, you need to report the problem to upper management.
Having a trigger-based approval process is standard with modern technology. In other words, once the invoice is validated, your chosen system should automatically send it to an authorised person for approval. They will receive a notification requesting their final review. If everything’s in order, they can give a green light for payment release in just a few clicks.
After this, the payment can get processed. You are obligated to keep the records for the sake of financial audits, with respect to your company policy and any compliance requirements.
Did you know?
Paying supplier invoices in a regular, timely way ensures you’re on top of your cash flow. But when relying on manual or overly complex invoicing systems, bills can be forgotten, causing late fees or cancellations. Upgrading your invoicing system can make a big difference. Learn more about future proofing your finances.
If you want to handle accounts payable at scale, you have to include automation into your financial workflow. By automating invoice matching, you can prep and close books five times faster. However, speed and efficiency are just the beginning of automated invoice matching.
Many companies rely on ERP systems for automation. The goal is to reduce manual work and optimise cash flow. This is what helps you free up resources for more important tasks such as forecasting, strategy, and business innovation.
From data entry errors to incorrectly archived documents, a lot can happen when you’re matching invoices manually. When the process gets automated, the chances for discrepancies decrease and you get to streamline an important segment of your financial operations.
When you remove manual processes, you are less likely to miss paying an invoice. This means you won’t have to pay late payment fees. It’s also how you build trust with your vendor. Timely payments are a sign of reliability. Having an impeccable reputation in that sense might aid your terms and conditions with the supplier.
Having a fragmented view of your company’s finances is stressful. It’s also risky, business-wise. Without real-time access to relevant data, you can't accurately understand where your organisation stands financially. Having a single source of truth makes insights immediately available. Likewise, invoice management gets a lot easier.
Automations help you control your spend management more effectively. You can streamline the accounts payable process, predict outflows, and prevent cash shortages. Save hours and balance the books – confidently and accurately.
Related read: Learn how digital agency Savvy Moves increased their cash flow visibility and saved 20 hours on their financial administrative tasks.
When you rely on comprehensive solutions that automate manual processes, you get a lot more than a boost in efficiency. Platforms with built-in analytics and dashboards bring you insights you can understand in a single glance. The most advanced solutions offer in-platform access to tailored credit offers so that you can ease the pressure as and when you need it.
Juni is a powerful platform for your business banking and financial operations. It’s designed to give you more control over your company’s financial health. Imagine having a single login to track and reconcile payments, manage spend and cash flow and access relevant insights in real-time. Well, that’s exactly what you get.
Juni collects and scans your invoices automatically and pre-fills all the important payment details. It also matches your paid invoices to the right transactions.
These features collectively make the platform effective in streamlining invoice matching processes, improving efficiency, and reducing the likelihood of payment errors or discrepancies.
Juni automates the process of matching invoices with corresponding purchase orders or receipts, reducing manual effort and human error.
Let’s say you’re running regular ads for your business. Juni will collect and scan your Meta and Google Ads invoices automatically and pre-fill all the payment details. Paid invoices will get matched to the right transactions. Juni cards make the payment process easier and there’s no need to do anything manually.
With Juni Capital, you can unlock interest-free credit cards to fuel your growth or leverage Invoice Credit to release trapped funds, enjoying repayment terms of up to 120 days.
Juni supports 2500+ integrations and fits into your existing tech stack perfectly. From accounting systems to different payment gateways and ad networks, it allows seamless data flow and matching across different platforms.
For example, you can get a centralised overview of your Shopify or Amazon store with real-time data and actionable insights – beautifully presented in a single dashboard.
Juni provides real-time insights into invoice status and discrepancies, enabling timely resolution of issues and better financial control. This empowers you to make better decisions at scale and stay proactive. That’s how you can take control of your revenue and grow sustainably.
Thanks to AI-driven technology, it’s now possible to fully optimise financial operations, remove the risk of human error, and gain firmer control over your cash flow.
With manual processing being the alternative, smart invoice matching is really a no-brainer. If you want to innovate and grow your business, you need to automate as much as you can. Your competition is likely already doing it. More importantly, you need to realise that everything below a complete financial overview is a compromise you cannot afford to make.
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If an invoice doesn’t match a purchase order, it will likely be flagged for further investigation. The AP department will first verify discrepancies internally and then reach out to the supplier. In most cases, the error gets resolved either by correcting the invoice or adjusting the payment amount.
Invoice matching is the process of comparing invoice line items with supporting documentation such as purchase order, goods receipt, or inspection requirements. The goal is to make sure that the billed goods or services were delivered and that the pricing and quantities match.
The best invoice matching software is compatible with your existing tech stack, has high levels of automation and is easy to use. Additionally, it has to follow high security standards and offer good value for money. The best choice of an invoice matching software highly depends on your unique business needs. When evaluating different options, make sure you ask questions related to pricing and avoid overpaying for hidden fees.
Juni is not a bank – yet. We’re a financial technology company providing e-money services and as such are not part of a deposit guarantee scheme. Learn more about our license and how we keep your business and money safe.
Juni Technology AB (company number 559248-0908) is licensed and registered as an electronic money institution with the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) (license no: 64025). Payment Card Solutions (UK) Limited (company number 05941947) and UAB B4B Payments Europe (company number 305539054) are regulated by the Financial Conduct Authority (ref: 930619) and the Bank of Lithuania (licence no: 76), respectively. The Juni Mastercard Corporate Card is issued by Payment Card Solutions (UK) Limited and UAB B4B Payments Europe pursuant to a license by Mastercard International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. Juni Technology AB. Masthamnsgatan 21, 413 28 Göteborg, Sweden. © 2025 Juni. All Rights Reserved.
