Invoice Validation

What is Invoice Validation?

Invoice validation is the automated verification of extracted invoice data against purchase orders, goods receipts, contracts, and business rules to confirm that an invoice is accurate and authorized before payment is approved.

How invoice validation works?

Three-way matching

The primary validation mechanism is three-way matching: confirming that invoice line items, quantities, and prices align with the corresponding purchase order and the goods or services receipt.

Discrepancies are flagged as exceptions and routed for human review or supplier clarification. These include:

• Price variances
• Quantity mismatches
• Duplicate invoices
• Missing PO references

Non-PO invoice validation

For invoices without a purchase order (non-PO invoices), validation involves:

• Applying general ledger (GL) coding rules to assign the invoice to the correct cost center and account
• Routing for manager approval rather than automated three-way matching

ERP integration

Invoice validation is typically integrated with ERP systems to access the reference data required for automated verification, including:

• Purchase order (PO) records
• Vendor master data
• Contract terms