Automate Invoice Validation with 3-Way Matching

Norman Rohr
10.12.25
6 min read

Manually matching invoices, purchase orders, and delivery notes is one of the most time-consuming and error-prone tasks in financial accounting. In medium-sized businesses especially, this process ties up valuable resources that are urgently needed elsewhere, such as for strategic financial planning. But there is a solution: automation through intelligent 3-way matching.

In this article, we’ll show you how to fully automate this process with software like finway. Using real-world examples, you’ll learn how companies not only save over 90% of their processing time but also drastically reduce their error rates and strengthen their financial planning.

What Is 3-Way Matching?

The three-way match is a fundamental process in accounts payable. It ensures that an incoming supplier invoice is correct before it is approved for payment. This involves comparing three key documents:

Purchase Order: The document that authorizes the purchase of goods or services at an agreed-upon price.
Delivery Note: The document that confirms the ordered goods or services have actually been delivered.
Invoice: The supplier’s request for payment.

If the details regarding quantities, prices, and items on all three documents match, the invoice can be paid without issue. When performed manually, however, this reconciliation is tedious and inefficient.

The Challenges of Manual Matching

For many finance teams, manual matching is a daily routine. Documents often exist in different formats—as PDFs in an email inbox, on paper on a desk, or within a separate inventory management system. The reconciliation requires a high degree of concentration and time.

Even small discrepancies, such as different item numbers, quantity variations, or tiered pricing, can lead to lengthy internal inquiries. The consequences are not only significant time investment but also an increased risk of errors, like duplicate payments or paying incorrect amounts. This inefficiency blocks valuable employee capacity that is missing for strategically important tasks like cash flow management and budget planning.

Example 1: The Time Drain in E-Commerce

An e-commerce company south of Munich uses an SME ERP system for managing its physical goods and finway as its central finance operating system. For invoice approvals, the managing director opens finway and the ERP system on two separate monitors and manually validates every invoice against the corresponding delivery notes.

This process is not only extremely time-consuming but also carries a high risk of error. With hundreds of transactions per month, something can easily be overlooked, leading to financial losses and unnecessarily complicating the accounting process.

The Solution: Automated 3-Way Matching with finway

An intelligent software solution like finway revolutionizes this process. Instead of manually comparing documents, the platform handles the matching completely automatically. Here’s how it works:

Digital Capture: All relevant documents—purchase orders from finway, invoices, and delivery notes—are captured digitally within the platform. Invoices and delivery notes can be easily uploaded via drag-and-drop or forwarded to finway by email.
Automatic Matching: The AI-powered software extracts all relevant data from the documents and compares it in real-time. Line items, quantities, and prices are automatically checked for consistency.
Deviation Management: If the system detects discrepancies, it flags them immediately. The finance team only needs to review the flagged deviations and can initiate inquiries with the responsible colleagues or the supplier directly within the software.
Touchless Processing: If all three documents match, the invoice is automatically validated and can be approved for payment and posted without further manual intervention (often called “dark processing”).

For the e-commerce company, this means a massive relief. finway automatically matches invoices against delivery notes and highlights any inconsistencies.

The result: a time saving of over 90% for this process step and a minimized error rate. The management team can once again focus on strategic decisions instead of spending hours on monotonous detail work.

Example 2: Cost Savings in the Trades

An HVAC distribution and installation company with about 40 employees in Southern Germany orders large quantities of heat pumps and other supplies. These are delivered to a central warehouse and then distributed to various construction sites. The purchase orders and delivery notes are often lengthy. Additionally, deliveries for multiple projects are sometimes consolidated onto different delivery notes and invoices.

This complexity makes manual verification extremely difficult. In this company, one full-time employee spends 40% of their time solely on comparing incoming invoices with delivery notes. This represents not only a huge administrative burden but also significant personnel costs.

By using finway, the matching process is fully automated here as well.

The software recognizes which items belong to which delivery note and purchase order, even with complex consolidated invoices. The time savings also exceed 90%. Translating this to workload, the company saves about 40% of a full-time employee’s time. Assuming an annual salary of €50,000, this equates to annual savings of around €22,000 – just by automating a single process step.

The Benefits at a Glance

Automating the 3-way match offers far more than just time savings. For CEOs and finance leaders of medium-sized companies, there are tangible strategic advantages:

Massive Efficiency Gains: Reduce manual effort in accounts payable by up to 90% and accelerate the entire invoice verification process.
Error Reduction: Minimize the risk of duplicate payments, overpayments, and fraud through precise, automated data matching.
Scalability: Your company can grow without an explosion in administrative overhead in the accounting department. The software effortlessly handles increasing document volumes.
Full Transparency: Gain a clear overview of the status of all invoices at any time and create an audit-proof record of all verification steps.
Focus on What Matters: Free up your finance team from routine operational tasks. Your experts can use their time for value-adding activities like analyzing financial data, planning liquidity, and driving strategic corporate development.

Conclusion: Free Your Finance Team

The manual matching of invoices and delivery notes is a relic of an analog past. In today’s digitized business world, it is not only inefficient but also an unnecessary cost factor and a brake on strategic growth.

With a solution like finway, you can completely automate this process and unlock the potential of your finance team. Instead of chasing documents and comparing numbers, your employees can focus on what truly matters: shaping the financial future of your company. Stop settling for manual processes and take the next step toward efficient and intelligent financial management.

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Accounting

Norman Rohr

Norman ist seit 2024 CEO von finway. Er verfügt über einen Master in International Business (ISM) und einen MBA in Finance & Strategy (Melbourne Business School). Mit über 20 Jahren Erfahrung in der Technologie- und Digitalmedienbranche auf vier Kontinenten ist er ein ausgewiesener Marketing- und Revenue-Experte. Bevor er zu finway kam, hatte er Führungspositionen bei Unternehmen wie Google, SVOX, Pixability, Uberall, Xentral ERP Software und Capmo inne und beriet zahlreiche weitere Firmen.