Invoice Confirmation Matching | Verify Purchase Orders and Deliveries

Trust, but verify.

When an invoice arrives, you need to confirm it matches what was ordered and what was received. This process—confirmation matching—is your defense against overpayment, fraud, and errors.

This guide covers confirmation matching from basics to automation.

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What is Confirmation Matching?

Definition

Confirmation matching is the process of verifying invoice details against supporting documents (purchase orders, delivery notes, contracts) before approving payment.

Think of it as a checkpoint:

• Invoice claims X
• Documents show Y
• Do X and Y match?

Why “Confirmation”?

You’re confirming that:

1. The goods/services were actually ordered (PO exists)
2. The goods/services were received (delivery note exists)
3. The amounts match what was agreed (prices correct)

What You’re Preventing

Risk	How Confirmation Matching Helps
Overpayment	Verify quantities match delivery
Fraud	Confirm PO was authorized
Errors	Catch price/calculation mistakes
Duplicates	Match to specific PO/delivery

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The Confirmation Process

Step 1: Receive Invoice

Invoice arrives via:

• Email attachment
• Vendor portal
• Mail (scanned)

Key fields to extract:

• Vendor name
• Invoice number
• Invoice date
• PO reference
• Line items
• Total amount

Step 2: Locate Source Documents

Find the matching:

Document	Where to Find	Key Identifier
Purchase Order	ERP system	PO number on invoice
Delivery Note	Receiving system	Delivery reference
Contract	Contract management	Vendor/project ID

Common Problem: Documents are in different systems.

Step 3: Compare Key Fields

Field	Invoice	PO	Delivery	Status
Quantity	100	100	95	❌ Mismatch
Price	¥1,000	¥1,000	-	✅ Match
Total	¥100,000	¥100,000	-	❌ Should be ¥95,000

Step 4: Investigate Discrepancies

For each mismatch:

1. Document the variance
2. Determine if it’s material
3. Contact vendor or internal team
4. Resolve before payment

Step 5: Approve or Reject

Decision	When
Approve	All fields match within tolerance
Partial approve	Request credit for overcharges
Reject	Significant discrepancies
Hold	Awaiting clarification

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Common Discrepancies

Quantity Mismatches

Scenario	Example	Action
Under-delivery	Received 95 of 100	Pay for 95
Over-delivery	Received 105 of 100	Return 5 or approve extra
Wrong count	Invoice says 100, received 90	Request correction

Price Discrepancies

Scenario	Example	Action
Price increase	PO: ¥1,000, Invoice: ¥1,100	Verify contract terms
Discount missing	10% discount not applied	Request credit
Wrong currency	USD vs JPY confusion	Clarify

Timing Issues

Scenario	Example	Action
Invoice before delivery	Invoice dated 1/1, delivery 1/15	Hold until confirmed
Old PO	Invoice references expired PO	Verify renewal
Duplicate invoice	Same invoice sent twice	Reject duplicate

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Tolerance Levels

Not every variance needs investigation.

Setting Thresholds

Variance Type	Common Tolerance
Quantity	1-3%
Unit price	0-2%
Total amount	¥1,000-5,000

Example Policy

Invoice Total	Tolerance
< ¥50,000	¥500 or 3%
¥50,000-500,000	¥2,000 or 1%
> ¥500,000	¥5,000 or 0.5%

When to Investigate

Always investigate if:

• New vendor (no history)
• First invoice for new contract
• Unusual items or services
• Above-threshold variance
• Manual override requested

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Manual vs. Automated Matching

Manual Process Time

Task	Time
Find PO	2-5 min
Find delivery note	2-5 min
Compare line items	5-10 min
Document findings	2-3 min
Total	11-23 min/invoice

Automation Benefits

Factor	Manual	Automated
Time per invoice	15+ min	1-2 min
Error rate	1-3%	<0.5%
Scalability	Limited	Unlimited
Audit trail	Manual	Automatic

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AI-Powered Confirmation

How AI Helps

1. Extract invoice data automatically
2. Match to PO and delivery records
3. Highlight discrepancies
4. Suggest resolution actions
5. Learn from corrections

The Workflow

Invoice received
      ↓
AI extracts data
      ↓
AI matches to PO/delivery
      ↓
Discrepancies flagged
      ↓
Human reviews exceptions only
      ↓
Approve with Enter

Handling Variations

Challenge	AI Solution
”ABC Corp” vs “ABC Corporation”	Fuzzy matching
Different date formats	Normalization
Line item descriptions vary	Semantic matching
Multi-page invoices	Document understanding

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Best Practices

1. Require PO Numbers

Reject invoices without valid PO references.

2. Centralize Documents

Store POs, deliveries, and invoices in accessible systems.

3. Set Clear Policies

Document tolerance levels and escalation paths.

4. Track Problem Vendors

Flag vendors with frequent discrepancies.

5. Automate Routine Matches

Focus human effort on exceptions.

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Integration Considerations

With ERP Systems

System	Integration
SAP	Verify against MM/SD
Oracle	Link to PO module
NetSuite	Match via transactions

With Accounting Software

Software	Consideration
freee	Match to registered invoices
QuickBooks	Verify vendor/item records
Xero	Link to purchase orders

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Summary

Confirmation Matching Steps

1. Receive invoice
2. Locate source documents
3. Compare key fields
4. Investigate discrepancies
5. Approve or reject

Key Controls

Control	Purpose
PO matching	Authorized purchase
Delivery matching	Goods received
Price matching	Correct terms
Tolerance levels	Focus on material variances

Key Takeaways

1. Confirmation = Trust but verify
2. 3-way matching catches billing errors
3. Tolerances prevent wasting time on immaterial variances
4. AI automates routine matching, humans handle exceptions

Stop paying blindly. Confirm before you pay.

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