Matching process

Matching process

The matching process involves the following steps:

  1. Invoice arrival and AI Smart ScanAI Smart Scan is a tool that reads scanned invoice images or PDFs and extracts the details, which are used to populate the fields on a bill. scanning: when a PO-backed invoice enters our system, our advanced AIArtificial Intelligence Smart Scan technology scans it for data extraction.

  2. Linkage to relevant POs: upon scanning, the system links the invoice to the corresponding purchase orders (POs).

    1. Automatic linkage: If the invoice includes the PO number, this linkage is automated, and the invoice proceeds to the matching stage.

    2. Manual linkage: in cases where the PO number is not found on the invoice, users can manually establish the linkage on the invoice review screen. Here, they can select from the list of open POs associated with the vendor. Notably, there is no requirement to populate custom fields on this screen.

  3. Matching preparation: once the invoice is successfully linked to the PO(s), it is primed for the matching process.

    1. Automated matching attempt: the system automatically attempts to match each line item on the invoice with its corresponding PO entry.

    2. Manual review trigger: invoice line items that don't achieve an automatic match or have discrepancies between the invoice and PO, or where mandatory coding is incomplete on the PO, are flagged for manual review.

      1. First manual review stage – matching: In the initial phase of manual review, each invoice line item is carefully examined and either matched to a specific PO line or categorized as a non-PO item.

      2. Second manual review stage – coding verification: Following matching, the second manual step involves reviewing the coding information derived from the linked PO lines. Any necessary additions or adjustments are made to ensure accuracy.

Linkage

PO numbers are used to link bills to one or more POs and receipts.

Matching AI icon

We can compare fields at only the header level or at both the header and line levels. Tipalti AI identifies discrepancies in PO matchingThe process of matching goods and services from purchase orders to invoices (2-way matching), and receipts (3-way matching).

Headers

The payee, payer entityAn entity can be a subsidiary, division, business unit, brand, etc. of your organization. Entities can have similar or different AP processes and workflows., currency and bill amount are matched across headers. The following table lists the field names that are compared and provides notes about matching.

Bill field

PO field

Notes
Payee ID Payee ID  
Payer entity Payer entity Used for matching only if a value exists in both the bill and PO
Currency Currency A difference between bill and PO currency is considered a mismatch.
Total amount Unbilled amount Total bill amount must be ≤ sum of the unbilled amounts for all linked POs.
Buyer PO approvers An alphabetical list of all the PO approvers as shown in your ERP
Custom Fields According to mapping If the custom field exist on the PO header we will pull the values from the PO to populate the values on the invoice

Lines

The unit type, quantity, price and amount are matched across lines. The following table lists the field names that are compared and provides notes about matching.

Bill field

PO field

Notes
  • Item #
  • Description
  • Item #
  • Description
  • "Item" vs. "Item" is compared.
  • If "Item" vs. "Item" cannot be matched, then "Item" vs. "Description" is compared.
  • If "Item" vs. "Description" cannot be matched, then "Description" vs. "Description" is compared.
Quantity Quantity
  • Bill line quantity must be ≤ sum of the unbilled quantity of all linked PO lines
  • "Quantity" values are normalized using units conversion (e.g., 1 kg = 1000 grams), which is based on the units used in the PO.
  • If only one document indicates units, the non-normalized values of the quantities are compared.
  • The PO billed quantity is updated according to the quantity indicated on the matched bill.
Unit price Rate
  • "Unit price" and "Rate" values are normalized using units conversion (e.g., 1 kg = 1000 grams), which is based on the units used in the PO.
  • If only one document indicates units, the non-normalized values of "Unit price" and "Rate" are compared.
Line amount Unbilled line amount
  • Compared only if "Quantity" and "Unit price"/ "Rate" are missing*
  • The total unbilled PO amount equals the original PO amount minus the sum of all matched bill line amounts.
*If values for "Unit price" or "Quantity" are missing from the bill line, Tipalti's PO matching engine calculates the implied value for the field based on the values that do exist for the bill line. If both "Unit price" and "Quantity" are missing, Tipalti uses the PO line linked to the bill to calculate the values based on the logic that the bill line price is assumed to equal the price of the PO line that was linked to it.

When is a bill not fully matched?

Bills are considered not fully matched when:

  • A PO number is not identified on the bill.
  • The POs identified on the bill are missing in Tipalti.
  • The bill has been updated. In this case, the bill is sent for automatic matching, which may or may not result in a fully matched bill.
  • A linked PO or receipt has been updated. In this case, the bill is sent for automatic matching, which may or may not result in a fully matched bill.
  • Matching fails for one or more field values.
  • Coding is missing in at least one PO line linked to the bill

Bills that are not fully matched have "matching exceptions" that need to be reconciled. These bills are sent to the "PO matching" subtab so that users can reconcile the matching exceptions.

PO line custom fields

You can view custom fields in the PO matching screen while matching invoices.

Click the three dots on the right side of the relevant line to open a tooltip labeled "PO line details," showcasing the custom fields of the relevant bill line of type bill line + PO line, arranged in alphabetical order for quick and easy visibility.

Switch bill flow from 2-way to 3-way matching and vice versa

If a bill is set to go through a 2-way or 3-way matching flow, you can switch the flow to 3-way or 2-way, respectively, from the matching screen.

  1. On the "Matching" tab, click "Actions" and select "Send 2-way" or "Send 3-way". The list option that displays depends on the flow the bill is already set to go through.

  2. In the dialog, click "Confirm" to switch the bill flow.

Click here if you want to switch the bill flow for all the bills of a specific payee.