ManaTech

Automation Guide

How to Automate Invoice Reconciliation

Step-by-step guide to automating your invoice reconciliation process — from receipt to payment — using AI and custom integrations.

Quick Answer

Automating invoice reconciliation delivers 70-80% reduction in processing time and saves $40,000-$80,000 annually. Follow these 5 steps to implement.

Time Savings

70-80% reduction in processing time

70-80% reduction in processing time, saving 15-25 hours per week for a team processing 500+ invoices monthly

Cost Savings

$40,000-$80,000

$40,000-$80,000 annually in reduced processing costs, eliminated penalties, and captured discounts

How It Works

Step-by-Step Automation Approach

01

Invoice Ingestion

Invoices are received via email, supplier portals, or direct upload. The automation system monitors all channels and captures incoming invoices in real-time.

Instant
Email integrationAPI connectorsFile watchers

Tip: Set up a dedicated accounts@ email address for all invoice submissions to simplify ingestion.

02

AI Data Extraction

OCR and NLP extract key fields from each invoice: vendor name, invoice number, date, line items, amounts, tax, and payment terms. The AI handles invoices in any format — PDF, scanned images, or digital documents.

5-15 seconds per invoice
OCR engineNLP modelCustom extraction rules

Tip: Train the extraction model on your most common invoice formats for 99%+ accuracy on routine invoices.

03

Three-Way Matching

The system automatically matches each invoice to its corresponding purchase order and goods receipt. Quantities, unit prices, and totals are compared. Any discrepancy beyond a configurable threshold is flagged for review.

1-3 seconds per match
Matching enginePO databaseReceiving records

Tip: Set tolerance thresholds (e.g., 2% variance) to avoid flagging minor rounding differences.

04

Exception Handling

Flagged invoices are routed to the appropriate reviewer with all relevant context — the invoice, the PO, the receipt, and a summary of the discrepancy. Reviewers approve, reject, or escalate directly in the system.

2-5 minutes per exception
Review dashboardNotification systemApproval workflows
05

Payment Processing

Approved invoices are queued for payment based on payment terms and cash flow optimisation. The system can schedule payments to capture early-payment discounts or align with cash flow targets.

Automated
Payment gatewayAccounting system syncCash flow optimiser

Tip: Configure the system to automatically schedule payments that capture 2% early-payment discounts — this alone can pay for the automation.

Tool Options

Recommended Tools

Bill.com

From $45/user/month

Cloud-based AP automation with approval workflows.

Pros

  • Easy setup
  • Good for simple AP workflows
  • Pre-built integrations

Cons

  • Per-user pricing
  • Limited customisation
  • No AI extraction

Tipalti

From $99/user/month

End-to-end payables automation for mid-market companies.

Pros

  • Global payments
  • Tax compliance
  • Supplier management

Cons

  • Complex setup
  • Expensive for SMBs
  • Overkill for simple AP

ManaTech Custom Build

$15,000-$35,000 build + $1,500/month maintenance

Purpose-built invoice automation with AI extraction and deep integrations.

Pros

  • AI-powered extraction
  • Three-way matching
  • Custom workflows
  • No per-user pricing

Cons

  • Higher upfront investment
  • 6-10 week build time

Frequently Asked Questions

How long does it take to implement invoice automation?

SaaS tools like Bill.com can be set up in 1-2 weeks. Custom-built solutions with AI extraction and three-way matching typically take 6-10 weeks from kickoff to production. We deploy in phases so you see value from week 3.

What if our invoices are in non-standard formats?

AI-powered extraction handles invoices in any format — structured PDFs, scanned paper invoices, email body text, even handwritten invoices. The system learns from corrections and improves accuracy over time. Off-the-shelf tools typically require standardised invoice formats.

Can invoice automation work with our existing accounting software?

Yes. We integrate with Xero, QuickBooks, MYOB, and major ERP systems. Approved invoices sync directly to your accounting platform with correct coding, so your books stay current without manual entry.

Ready to automate invoice reconciliation?

Book a free discovery call to discuss how ManaTech can automate your invoice reconciliation process and save your team hours every week.

Book a Discovery Call