How do I scan an invoice for errors?

To scan an invoice for errors, read it into fields first: vendor, invoice number, dates, line items, subtotal, tax, total and currency. Then run six checks. The line items must sum to the subtotal. Subtotal plus tax must equal the total. Quantities and rates must match what was ordered or agreed. The invoice number must not already exist in your records. The currency and tax treatment must be the ones expected for that vendor. And the payment details must match the vendor's known details rather than new ones supplied on this invoice.

How to Scan an Invoice for Errors

How it works

Checking an invoice is not one activity. It is a short list of independent checks, and the reason invoices go unchecked is that doing them by eye on a PDF is slow and unrewarding, so the habit does not survive volume.

Everything gets easier once the invoice is data. With vendor, number, dates, line items, subtotal, tax and total in fields, the arithmetic checks are instant, the duplicate check is a lookup, and the rate comparison is a query against the same vendor's history.

The checks fall into three groups. Internal consistency, where the invoice must agree with itself. Agreement with your records, where the quantities, rates and invoice number must line up with what you ordered and what you have already received. And payment safety, where the bank details must match the vendor you know.

Examples

Line items totalling 4,180, a subtotal printed as 4,810, and a total consistent with the subtotal. A transposition, in the vendor's favour, and it survives any check that only looks at the bottom line.

A monthly service invoiced at 12 units for eleven straight months, then 14 units, with no change in the service. The total looks unremarkable and the quantity is the error.

The same invoice number from the same vendor, paid in March and again in May after a polite reminder. Nothing looked wrong either time in isolation.

A familiar vendor's invoice with new bank details and a note apologising for the change. This is the one to phone about, on the old number.

Benefits

Money that would have left quietly stays. Duplicate payments are the largest recoverable category for most businesses, and they are entirely preventable with a lookup.

You also get vendor level history, which turns price increases into something you can negotiate about rather than discover a year later.

Common mistakes

Checking only the total. Almost every real error lives in a line item, a quantity or a rate.

Trusting the invoice number alone for duplicate detection, when the same bill often arrives with a different reference.

Reviewing invoices one at a time with no vendor history, which makes creeping increases invisible.

Accepting changed payment details because the email thread looks genuine.

Filing the invoice without linking it to the payment, so nothing can ever tell you it was settled twice.

Frequently asked questions

What is the most common invoice error?

Duplicates. The same invoice arrives by email and by post, or is submitted again after a chasing message, and gets paid twice. It is far more common than deliberate overbilling and much easier to detect, because it needs nothing more than a check against invoice numbers and amounts you already hold.

How do I catch a price that quietly went up?

Compare the rate on each line against the rate on previous invoices from that vendor. An increase within a normal looking total is invisible on a single invoice and obvious across a series, which is why vendor history matters more than reviewing each invoice alone.

What is invoice redirection fraud?

An invoice arrives that looks legitimate, often a real copy of a genuine one, with the bank details changed to an account the fraudster controls. The defence is a rule rather than a judgement: never pay to details that differ from the ones on file without confirming by phone on a number you already had.

Should tax always be checked?

The arithmetic should be, always, since it is free to verify. Whether the treatment is correct depends on jurisdiction and on the relationship with the vendor, and that judgement belongs with your accountant. Software can tell you the numbers do not add up. It should not tell you what your tax position is.

When is it worth automating these checks?

As soon as invoice volume passes a point where nobody actually reads them, which is usually far lower than people expect. The checks are arithmetic and lookups, which software does perfectly and humans do inconsistently once bored.

How Karchu helps

Karchu reads invoices and bills into fields, including line items, and runs the arithmetic checks automatically: line items against subtotal, subtotal plus tax against total, with any difference shown rather than absorbed. Duplicates are flagged on vendor, number, amount and date together.

Invoices are then matched to the transaction that paid them where a plausible match exists, with the match confidence visible, so an invoice paid twice stops being invisible. Karchu does not give tax advice, and figures it cannot read confidently are left empty and sent to review rather than filled in.

No bank credentials. Statement files only.