Invoice Reconciliation

Invoice reconciliation is the process of checking a supplier’s invoice against the purchase order and the goods or services actually received. In a restaurant, it helps confirm that the business is paying the agreed price for the correct products and quantities, and that credits, substitutions, delivery charges and taxes are recorded accurately.

The three-way match

A common control is the three-way match:

1. Purchase order: what the restaurant ordered, including product specification, quantity and agreed price.
2. Receiving record: what actually arrived, including quantity, condition, substitutions and any rejected items.
3. Supplier invoice: what the supplier is charging, including unit prices, pack sizes, freight, deposits and taxes.

Example: produce delivery

If a restaurant ordered 10 cases of lettuce but only 9 cases arrived, the receiving record should show the short delivery. The invoice should be checked to ensure the business is not charged for all 10 cases unless the supplier issues a corresponding credit or correction.

Common invoice discrepancies

• Incorrect unit price or pack size.
• Quantity billed that does not match the receiving record.
• Unapproved substitutions or products that do not meet specification.
• Missing credits for rejected, damaged or short-delivered items.
• Duplicate invoices, incorrect taxes or unapproved delivery charges.

Invoice reconciliation versus accounts payable approval

Invoice reconciliation checks that the invoice agrees with the order and receipt. Accounts payable approval is the authorization to pay the invoice after required checks and approvals are complete.

Chef’s tip: resolve discrepancies while the delivery details are still fresh. Record shortages, damaged products and substitutions at receiving so the office team has evidence when reconciling the invoice.