The Invoice Has Been Received, But Does It Match the Purchase Order? Here's How to Automatically Check It

How Can POs and Invoices Be Automatically Matched?

AI Automationcan help companies match Purchase Orders, invoices, and goods receipt data before transactions are forwarded to the payment process.

• PO number, vendor, quantity, price, and total can be compared automatically.

• Invoice data can be extracted from PDF or digital documents.

• The difference between PO, receipt, and invoice can be assigned a statusMismatch.

• Appropriate transactions can be forwarded to approval or payment.

• Problematic transactions can be directed to Finance or Procurement for review.

This process is known as3-way matching, namely matchingPO, Goods Receipt, dan InvoiceFor example, a PO contains 100 units, goods received are 100 units, and the invoice is also 100 units. If all parameters match, the transaction can enter the statusMatch.

Why Is Manual Matching Often a Problem?

In high-volume transactions, Finance must review numerous details. A single invoice can contain dozens of items. With hundreds of invoices per month, manual review is time-consuming and increases the risk of human error.

With AI Automation, workflow can be created like:

Invoice Received → Extract Data → Find PO → Compare Data → Check Receipt → Match / Mismatch → Approval → Payment

Each stage has a clear function.

1. Reading Invoice Data

Invoices can come from PDF, email, or vendor systems.

Information that needs to be taken includes:

• Invoice number.

• PO Number.

• Nama vendor.

• Invoice date.

• Quantity.

• Unit price.

• Discount.

• Tax.

• Total invoice.

With AI Automation, this information can be extracted and mapped to the fields used by the Finance system.

If the data is not read properly, the transaction should be enteredNeed Review, not directly processed.

2. Matching Invoice with PO

Once the invoice data is available, the system searches for the matching PO.

For example:

AFTER:50 units × Rp. 2 million = Rp. 100 million

Invoice:50 units × Rp. 2 million = Rp. 100 million

The results are as per.

But if the invoice contains55 unit, workflow can give a flag because the quantity exceeds the PO.

With AI Automation, such discrepancies can be discovered before the invoice is forwarded.

3. Compare with the goods received

PO and invoice alone are not enough.

Items that are actually received also need to be inspected.

For example:

PO = 100 units

Goods Receipt = 90 unit

Invoice = 100 unit

The invoice should not be immediately considered appropriate because the number of items received was only 90 units.

With AI Automation, these three data can be compared to determine the transaction status.

4. Check Price Difference

Price differences also need to be considered.

For example:

PO = Rp500,000/unit

Invoice = Rp525.000/unit

Difference Rp25.000 per unitThis may stem from a price change that has already been approved. However, if there is no approval or amendment, the transaction needs to be reviewed.

With AI Automation, workflow can provide threshold.

For example:

Difference ≤2% → Normal Review

Difference >2% → Escalation

This threshold is an example of a rule and needs to be adjusted to company policy.

5. Determining Action After Matching

Matching results should not only be numbers.

Workflows can use statuses:

• Match → lanjut approval/payment.

• Partial Match→ check receipt.

• Price Mismatch → review Finance/Procurement.

• Quantity Mismatch→ check PO and Goods Receipt.

• Missing PO → manual review.

• Need Review→ further examination.

With AI Automation, each status can trigger a different action.

How to Start 3-Way Matching?

• Define the mandatory fields of PO, Goods Receipt, and invoice.

• Make sure the PO number is a consistent identifier.

• Determine price and quantity tolerance.

• Create Match and Mismatch status.

• Determine who the PIC is for each type of mismatch.

• Add approval for exceptions.

• Save the invoice and PO as reference documents.

• Create an audit trail for each matching result.

• Connect ERP, purchasing, and finance systems via APIs if needed.

• Test the workflow with normal cases and mismatch cases.

• Use legal software for companies and officially licensed software.

Start with high-volume invoices with a relatively consistent format. Once matching results are stable, the workflow can be expanded to more purchasing categories.

FAQ

1. What is 3-way matching?

3-way matching is the process of matchingPurchase Order, Goods Receipt, dan Invoicebefore payment is made.

2. Can AI read PDF invoices?

Can. AI Automationcan help extract information such as invoice number, PO, quantity, price, and total.

3. What if the invoice is larger than the PO?

Workflow can provide statusMismatchand stop the automated process until Finance or Procurement performs a review.

4. Can quantity also be compared?

Yes. Quantities on the purchase order, goods receipt, and invoice can be compared to identify discrepancies.

5. Can the price difference be tolerated?

Yes. Companies can set a threshold, for example, a maximum difference of 2%, according to internal policy.

6. What happens if the invoice does not have a PO number?

Invoices can be directed toManual Reviewor a special workflow for transactions without PO.

7. Can the matching results be entered into ERP?

Yes, as long as the ERP provides an API, webhook, database integration, or appropriate integration mechanism.

8. Does Finance still need to do checks?

Yes. Normal transactions can be processed more quickly, while transactions with mismatches or certain risks can still be manually reviewed.