Validate Bills

Validating vendor bills helps ensure that billed amounts align with approved purchases and received goods. In Zoho ERP, this is done using Bill Reconciliation, which checks bills against related purchase documents and highlights discrepancies.

As part of Bill Reconciliation, you can choose 2-way or 3-way matching to define how bills are validated. Purchase Order Matching supports this process by associating bills with the relevant purchase orders and purchase receives, enabling accurate comparison of quantities, prices, and items.

Together, these capabilities help identify mismatches early, improve visibility into bill accuracy, and reduce the risk of incorrect or duplicate payments.

Bill Reconciliation

Bill Reconciliation helps you avoid overpaying for purchases by verifying bills against purchase orders and purchase receives. Bills that are not associated with purchase orders and purchase receives, or bills that have mismatched item prices will be flagged. A warning will be displayed for those bills.

Enable Bill Reconciliation

To enable Bill Reconciliation:

Go to Settings in the top right corner of the page.
Click Bills under Purchases.
In the General tab, slide the toggle next to Bill Reconciliation to Enabled.
Choose the reconciliation method.
- 2-Way Matching: The items in the bill will be compared with the items in the purchase order. If the bill items don’t have an associated purchase order or if there’s a mismatch of items’ prices, then the bill will be flagged with a warning.
- 3-Way Matching: The items in the bill will be compared with the items in the purchase order and purchase receive. If the items in the bill don’t have an associated purchase order and a purchase receive, or if there’s a mismatch of items’ prices, then the bill will be flagged with a warning.
Click Save.

View Flagged Bills

Bills that are not associated with purchase orders and purchase receives, or have mismatched item prices, will be flagged. A warning is displayed on the Bills List page, the Details page of those bills, and the Record Payment page when such bills are selected for payment. Here’s how you can view the warning on the Bills module:

Go to Purchases on the left sidebar.
Hover over Bills in the Modules bar and select Bills from the dropdown.
Click *the filter dropdown at the top and select Violated Bills. All bills with violations will be displayed, along with a warning icon next to them.
Click any bill. A banner with the reasons why the bill was flagged will be available.
Click View Item Details next to a reason to view additional information. Here’s how you can view the warning on the Payments Made module:
Go to Purchases on the left sidebar.
Hover over Payments in the Modules bar and select Payments from the dropdown.
Click + New in the top right corner.
Fill in the required details.
If there are flagged bills for the selected vendor, a warning will be displayed below those bills.

Disable Bill Reconciliation

You can disable Bill Reconciliation if required. Here’s how:

Go to Settings in the top right corner of the page.
Click Bills under Purchases.
In the General tab, slide the toggle next to Bill Reconciliation to Disabled.
Click Save.

Purchase Order Matching

Purchase Order Matching is the process of matching the details of a bill with the corresponding purchase order. When a bill is scanned in Zoho ERP, the system automatically fetches details such as the purchase order, quantity ordered, and the rate per quantity of each item. This allows organizations to ensure that the bill matches what they ordered. It also helps organizations save time by reducing the risk of errors that may occur due to manual data entry.

Note: You need to enable Bill Reconciliation in your organization to use Purchase Order Matching.

To use Purchase Order Matching: