Delivery and Invoice Matching | Prevent Payment for Undelivered Goods

You received an invoice for 100 units. But only 80 were delivered.

Without delivery-invoice matching, you’d pay for 20 units you never received.

This guide covers how to match delivery notes with invoices to ensure you only pay for what you get.

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What is Delivery-Invoice Matching?

Definition

Delivery-invoice matching is comparing what was delivered (per delivery note) with what’s being charged (per invoice) to ensure billing accuracy.

The Question You’re Answering

“Are we being charged for what we actually received?”

What You Compare

Document	Contains
Delivery note	What was physically received
Invoice	What you’re being charged for

What You’re Catching

Issue	Example	Impact
Over-billing	Invoice: 100, Received: 80	Overpayment
Missing items	Ordered Item C, not delivered	Claim not filed
Wrong items	Ordered A, received B	Incorrect billing
Damaged goods	5 units damaged	Should be credited

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The Matching Process

Step 1: Capture Delivery Information

When goods arrive:

1. Count items received
2. Check against packing slip
3. Note any damages
4. Sign delivery note
5. Enter into system

Common Problem: Receiving and AP are separate teams with separate systems.

Step 2: Receive Invoice

Invoice arrives with:

• Item descriptions
• Quantities
• Unit prices
• Total amount

Step 3: Match to Delivery Note

Field	Delivery	Invoice	Status
Item A	50	50	✅
Item B	30	35	❌ Over-invoiced
Item C	20	20	✅
Item D	10	-	❌ Not invoiced

Step 4: Handle Discrepancies

Scenario	Action
Invoice > Delivery	Request credit or revised invoice
Invoice < Delivery	Verify—may be separate invoice coming
Item mismatch	Clarify with vendor
Damaged goods	Request credit memo

Step 5: Final Approval

Only approve invoice when:

• All quantities match
• Credits received for discrepancies
• Or variance is within tolerance

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Common Matching Challenges

Challenge 1: Partial Deliveries

Order: 100 units Delivery 1: 60 units Delivery 2: 40 units Invoice: 100 units

Solution: Track cumulative deliveries against invoices.

Challenge 2: Item Description Variations

Delivery Note	Invoice
Widget A-100 Blue	A-100 Widget (Blue)
10kg Box, Flour	Flour 10kg

Solution: Match by product code, not description.

Challenge 3: Timing Differences

Scenario	Issue
Invoice before delivery	Can’t verify yet
Delivery note lost	No record to match
Wrong delivery date	Hard to correlate

Solution: Require delivery confirmation before invoice processing.

Challenge 4: Multiple Locations

Deliveries to:

• Warehouse A: 50 units
• Warehouse B: 30 units
• Office: 20 units

Invoice: 100 units

Solution: Consolidate delivery data before matching.

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Tolerance Thresholds

Why Tolerances Exist

Not every variance is worth investigating:

• Small rounding differences
• Weight variations (bulk goods)
• Minor quantity discrepancies

Typical Tolerance Levels

Goods Type	Quantity Tolerance
Counted items	0%
Weighed goods	1-3%
Liquids	2-5%
Bulk materials	3-5%

Setting Your Policy

Consider:

1. Value per unit
2. Historical variance patterns
3. Vendor reliability
4. Measurement precision

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The 3-Way Match

Delivery-invoice matching is stronger when combined with PO matching.

3-Way Match Flow

Purchase Order ←→ Delivery Note ←→ Invoice

What Each Match Catches

Match	Catches
PO vs Delivery	Unauthorized deliveries
Delivery vs Invoice	Billing for undelivered goods
PO vs Invoice	Price discrepancies

Example

Field	PO	Delivery	Invoice	Issue
Qty	100	80	100	Over-invoiced
Price	¥1,000	-	¥1,100	Price increase
Total	¥100,000	-	¥110,000	¥30,000 overpaid

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Manual vs. Automated Matching

Manual Process

Step	Time
Find delivery note	3-5 min
Find invoice	2 min
Compare line by line	5-10 min
Document discrepancies	3 min
Total	13-20 min

With Automation

Step	Time
System matches automatically	5 sec
Review flagged exceptions	2 min
Total	2-3 min

Automation Benefits

Factor	Manual	Automated
Time	15+ min	2-3 min
Accuracy	Human error	Consistent
Scale	Limited	Unlimited
Audit trail	Manual	Automatic

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AI-Powered Matching

How AI Improves Matching

Challenge	AI Solution
Description variations	Semantic understanding
Different formats	Format normalization
Missing references	Intelligent correlation
Partial matches	Cumulative tracking

Totsugo Workflow

1. Upload invoice PDF
2. AI extracts line items
3. AI matches to delivery records
4. Flags discrepancies
5. Review exceptions only
6. Approve with Enter key

What Changes

Before	After
Search for delivery note	Auto-matched
Line-by-line comparison	AI comparison
Manual exception log	Automatic flagging
Paper-based audit trail	Digital trail

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Best Practices

1. Capture Deliveries Promptly

Enter delivery data same day. Delays cause matching problems.

2. Require Delivery Reference on Invoices

Vendors should include delivery note numbers.

3. Standardize Product Codes

Match by code, not description.

4. Set Clear Tolerance Policies

Document what variances are acceptable.

5. Track Vendor Performance

Monitor which vendors have frequent discrepancies.

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Integration Points

Receiving System → Matching

Data	Purpose
Delivery date	Timing verification
Quantities received	Comparison to invoice
Condition notes	Credit claims
Receiver signature	Proof of receipt

Matching → Accounting

Data	Purpose
Approved invoices	Payment processing
Variances	Credit tracking
Match status	Audit documentation

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Summary

Matching Steps

1. Capture delivery data at receipt
2. Receive and extract invoice data
3. Match quantities and items
4. Handle discrepancies
5. Approve when matched

Key Benefits

Benefit	Impact
Prevent overpayment	Direct savings
Catch missing credits	Recovered funds
Improve vendor relations	Clear expectations
Audit compliance	Documentation

Key Takeaways

1. Match before paying—never pay for what you didn’t receive
2. Tolerances focus effort on material variances
3. 3-way matching provides complete verification
4. AI handles routine matching, you handle exceptions

Stop paying for air. Match to delivery first.

👉 Try PDF reconciliation for free