Invoice Matching – AP Team Step-by-Step Guide

Invoice matching is the process used to confirm that goods or services billed by a supplier were approved and received before payment is issued. Matching compares information across key documents to determine whether an invoice is eligible for payment.

The documents involved in matching include:

  • Purchase Orders (POs)
  • Receipts
  • Invoices (or credit memos)

Matching helps ensure accurate payments, prevents overpayments, and supports compliance with organizational controls.

Types of Matching:

Two-Way Match

A two-way match compares:

  • Purchase Order
  • Invoice

This method is commonly used for services or items where receipts are not required.

Three-Way Match

A three-way match compares:

  • Purchase Order
  • Receipt
  • Invoice

This is the most comprehensive matching method. Payment cannot proceed until all three documents align.

Matching Status Definitions

  • Matched: All required documents align and the invoice is approved for payment.
  • Within Tolerance: Differences exist but fall within the allowed tolerance limits set by the organization.
  • Outside of Tolerance: Differences exceed allowed tolerance limits and require review.
  • Do Not Match: Matching criteria has not been met.

Receipt Lead Time

Receipt Lead Time is the number of days the system waits for a receipt before flagging an invoice as a matching exception.

During this time:

  • The system holds the invoice
  • Matching resumes once the receipt is entered or the lead time expires

Manual Matching

Manual matching is required when invoices fall outside tolerance or when matching cannot be completed automatically.

Common reasons for manual matching include:

  • Price differences
  • Quantity differences
  • Shipping or handling discrepancies

Tolerance rules are configured by system administrators during implementation.

How AP Reviews and Resolves Matching Exceptions

Step 1: Navigate to Invoices Requiring Approval

You can access invoices needing review using any of the following paths:

  • My Assigned Approvals > Invoices
  • Accounts Payable > Approvals > Invoices to Approve
  • Orders > Search > Invoices

Step 2: Open the Invoice

Click the invoice number to open the document.
Note: The invoice must be in one of your assigned approval folders.

Step 3: Review Matching Issues

  • Navigate to the Matching section on the invoice
  • Review listed tolerance or matching issues

Forcing a Match (When Permitted)

This action requires the Force Match Documents permission.

Step 4: Force Match the Invoice (If Applicable)

If the invoice should proceed despite matching issues:

  1. Open the Actions menu on the invoice
  2. Select Assign & Approve/Complete and Match
  3. Enter a reason for the force match (optional but recommended)
  4. Leave the Force Match checkbox selected
  5. Click Approve/Complete Step

If this is the final workflow step, the invoice will be marked as Matched – OK to Pay.

Automated Matching

Automated matching allows invoices to be matched and approved without manual intervention when they meet predefined criteria.

How Automated Matching Works

  • Matching rules and tolerances are configured by administrators
  • Invoices that meet these rules are automatically marked payable
  • Invoices outside tolerance are routed for manual review

Automated matching can also:

  • Hold invoices until receipts are entered
  • Release invoices once Receipt Lead Time expires

Note: Automated matching should not be used for invoices with non-PO lines unless specifically configured.

Reviewing Matching Rules on an Invoice

To understand why an invoice did not auto-match:

  1. Open the invoice
  2. Click the Matching tab
  3. Click the Show Matching Rules icon

A window will display:

  • PO details
  • Tolerance details
  • Matching rules evaluated

The first rule listed indicates where the invoice failed matching.

Approval Restrictions for Matching Exceptions

When approval restriction is enabled:

  • Invoices cannot be approved until the matching issue is resolved
  • The standard Approve button is hidden

Exceptions

Users with special permissions may still:

  • Approve & Match or Approve, Complete & Match (Force Match)
  • Expedite invoices through workflow

The invoice sidebar will display the reason for the mismatch.

Handling Missing Receipts

If a receipt is missing:

  • A notification appears in the invoice summary sidebar
  • Click Create Receipt to enter the receipt
  • Submit the receipt through workflow (if enabled)
  • Return to the invoice once the receipt is completed

Once the receipt is processed, matching will resume automatically.

Final Outcome

Once all matching exceptions are resolved:

  • The invoice status updates to matched
  • Notifications are removed
  • The Approve option becomes available

This process ensures accurate, compliant, and timely invoice payments while minimizing manual effort for the AP team.