Short answer: invoice verification means checking a supplier invoice before it is booked and paid. Five questions cover it: is it a real invoice from a supplier we know, is it addressed to this company, did we order and receive what it charges for, are the lines, totals and VAT correct, and has it been booked before? An invoice that fails any of them waits until someone has an answer.
Most invoices pass in seconds. The point of a fixed routine is that the few that do not pass get caught by the same checks every time, whoever is doing the booking.
What invoice verification is, and what it is not
Verification sits between receiving a document and registering it as a bill. It is not the same as approval. Verification asks "is this invoice correct and genuine?", approval asks "do we agree to pay it?". In a small business the same person often does both, but they are different questions, and an approver should see the result of the checks before saying yes.
It is also not three-way matching, although that is one way to do part of it. Three-way matching compares the invoice with a purchase order and a goods receipt. Most small businesses have no purchase orders, so the "did we receive it" check is a question to the person who ordered.
The five checks
| Check | What to look at | Typical failure |
|---|---|---|
| 1. Is it a real invoice? | Document title, supplier name, VAT number, bank details | A statement, reminder or pro forma booked as a bill; a fake supplier; changed bank details |
| 2. Is it ours? | Buyer name, address and VAT number | Invoice for a sister company or another client |
| 3. Did we get it? | Lines against what was ordered and delivered | Billed for 12, delivered 10; service not yet done |
| 4. Are the numbers right? | Line maths, VAT rate per line, totals | Wrong VAT rate, a rounding gap, totals that do not add up |
| 5. Is it new? | Supplier, invoice number, amount and date against what is booked | The same invoice booked twice |
1. Is it a real invoice?
Read the document title first. A supplier statement, a payment reminder or a pro forma is not a bill, and booking one creates a liability you do not owe. Then check that the supplier exists in your records. A new supplier is not a problem, but it should be set up deliberately, with the VAT number checked in VIES (see how to check an EU VAT number).
Bank details deserve their own step. Mandate fraud works by emailing a business as if from a supplier it already pays and saying the bank details have changed. The National Business Crime Centre's advice is to verify payment and supplier details with the company on a phone number you already hold, or in person, before acting. If an invoice shows a different IBAN from the one on file, stop and call.
2. Is it addressed to this company?
In accounting firms this is the check that fails most often. A director runs two companies, a supplier bills the wrong one, and the invoice lands in the wrong client's pile. Input VAT can only be claimed by the business that received the supply, so check the buyer's name, address and, where shown, VAT number against the client you are booking for.
3. Did we order and receive it?
Compare each line with what was agreed. Check quantities, unit prices against the quote or contract, and the service period for anything recurring. If nobody in the finance team knows, ask the person who ordered. A short note on the bill ("confirmed by Maria, 10 delivered, 2 to follow") saves the same question at payment time.
4. Are the lines, totals and VAT right?
Multiply each line, add them up, and check the VAT per rate, not just the total. Mixed-rate invoices are where errors hide: a delivery charge at the standard rate on an invoice of reduced-rate goods, or a zero-rated line taxed by mistake.
Then check the invoice carries what a valid VAT invoice needs. Under Article 178 of the EU VAT Directive, a business deducting input VAT must hold an invoice drawn up under the invoicing rules, and Article 226 lists what it must contain. The main items:
- date of issue and a unique sequential invoice number
- the supplier's VAT number, and the customer's where the customer accounts for the VAT (for example under the reverse charge, which must then be stated as "Reverse charge")
- full names and addresses of supplier and customer
- quantity and nature of the goods, or extent and nature of the services
- date of supply, if different from the invoice date
- taxable amount per VAT rate, unit price excluding VAT, the VAT rate and the VAT amount
HMRC's list for a full UK VAT invoice is very similar. HMRC's manual also notes that for supplies up to £250 a less detailed invoice can be issued, while above £250 a full invoice is required (a modified invoice is allowed with the customer's agreement). If something is missing, ask for a corrected invoice before claiming the VAT.
5. Has it been booked before?
Check the supplier, invoice number, amount and date against bills already in the books, not just against the pile on your desk. A reminder with the original attached, or a PDF and an e-invoice for the same supply, are the classic duplicates. The full set of rules is in how to detect and prevent duplicate invoices.
A worked example
An office supplier sends this invoice to a client:
| Line | Qty | Unit price | Net | VAT rate | VAT |
|---|---|---|---|---|---|
| Toner cartridge | 12 | 42.50 | 510.00 | 18% | 91.80 |
| Service call | 1 | 85.00 | 85.00 | 18% | 15.30 |
| Total | 595.00 | 107.10 |
Gross total on the invoice: 712.10.
Running the checks:
- Real? Known supplier, same VAT number and IBAN as on file. Pass.
- Ours? Addressed to the client's trading company, not the holding company. Pass.
- Received? The office manager confirms only 10 cartridges arrived; 2 are back-ordered. Query.
- Numbers? 595.00 + 107.10 = 702.10, not 712.10. Query.
- New? No bill from this supplier with this number or amount. Pass.
The invoice goes back to the supplier with two questions. The corrected invoice bills 10 cartridges: net 510.00, VAT 91.80, gross 601.80. Without the checks, the client would have paid 110.30 too much (712.10 less 601.80).
A routine that keeps it quick
- One way in. Every supplier invoice for a client goes to one mailbox or one upload point, so nothing is checked twice or not at all. How to organise supplier invoices covers the set-up.
- Software does the reading, a person does the judging. Reading every line, the maths and the duplicate search are mechanical. Whether 12 cartridges were delivered is not.
- Queries in writing, on the bill. A note or a tagged comment on the invoice beats a separate email thread nobody can find in March.
- Approval after verification. The approver sees the checks and any open queries before saying yes. See purchase approvals.
- Bank details changes are a separate process. Only named people can change them, and only after a call to a known number.
Where Invoreg fits
Invoreg reads every line of a supplier invoice, whether it arrives as a PDF, a scan, a phone photo or an XML e-invoice: description, quantity, unit price, VAT rate per line and totals. It checks each new document against the workspace and the bills already in the accounting software and flags possible duplicates, suggests coding from the client's history, and lets you add comments, tag colleagues and route bills through approvals of up to three levels. Nothing is posted without a person approving it.
It does not hold purchase orders or goods receipts, so the "did we receive it" question and any bank details change still need a person. Try it on your own invoices: the first 20 invoices are free.