A set of AI capabilities, extraction, classification, validation, and routing, applied to the supplier-invoice processing cycle.
Traditionally, accounts payable meant reading every invoice, typing it in, validating VAT, routing it for approval, and posting the journal entry. AI inverts that flow: the invoice arrives, the system understands it, classifies it, identifies the supplier, and forwards it to the correct approver without anyone keying a single number. The concept isn't OCR plus manual steps, it's an agent that makes accounting decisions.Read the full pillar: AI in accounting in 2026 →
OCR vs AI
OCR (Optical Character Recognition) extracts text from an image. AI understands that text, places it in context, and makes decisions.
OCR answers "what does this image say?". AI answers "what should I do with this invoice?". Conflating them is why so many products advertise "AI" when what they actually have is improved OCR or a chat assistant. If the system doesn't classify the GL account (PGC in Spain), doesn't detect duplicates, doesn't decide approvals, it's not AI, it's OCR.Read the full breakdown: OCR vs AI in accounts payable →
3-way match · Three-way match · Triple reconciliation
Automatic comparison of three documents, purchase order, delivery note, and supplier invoice, before approving payment. The invoice clears only if all three agree.
It's the global standard for procure-to-pay financial control. Manually: you open three documents on three screens and cross-check numbers. Automated: the system does it on receipt. If the three don't match, it escalates to the right human with the discrepancy already identified.
Intelligent invoice capture
The process by which a system receives an invoice (via email, PDF, scanned paper, XML, or EDI) and extracts the key data automatically without human intervention.
It goes beyond a simple "upload invoice" interface: it identifies the issuer, extracts line-level detail, computes VAT correctly (including reverse charge and intra-EU), and verifies math coherence. Good intelligent capture works directly from the inbox, no one needs to upload anything.
Touchless AP · Lights-out AP · No-touch invoice processing
End-to-end processing of an invoice, from receipt to journal entry to payment, with zero manual intervention when the invoice satisfies your configured rules.
A "touchless" invoice flows in, gets approved by rule, gets posted, gets paid, without anyone typing a number. Humans only handle exceptions: unusual amounts, new suppliers, reconciliation discrepancies. It's the highest level of AP automation.
Verifactu · Spanish Verifactu system · RD 1007/2023
A Spanish tax authority (AEAT) system, established by RD 1007/2023, that requires invoicing software to record invoices in tamper-proof form and report them with QR codes and validation.
It's the system Spain uses to make tax evasion harder: invoices must be signed, chained, and reported in near-real time. Deadlines: 1 January 2027 for companies; 1 July 2027 for self-employed. Software that doesn't comply with Verifactu won't legally issue invoices in Spain.
A Spanish AEAT system requiring large companies (revenue >€6M/year) to report VAT data within 4 days, record by record.
SII is not Verifactu: SII is for large taxpayers and has been live since 2017; Verifactu is the next phase and applies to everyone. They share a principle: the AEAT wants to see your invoices in near-real time. If you handle SII manually, you're always one day late, and rejections accumulate.
Spanish chart of accounts (PGC) · Plan General Contable · PGC
The official Spanish chart of accounts and journal-entry standard. Three versions exist: full, SME, and self-employed.
Every received invoice in Spain ends up as a journal entry under the PGC. Accounts 6XX (expenses) or 2XX (fixed assets), 472 (input VAT), and 410 (suppliers) are unavoidable. The difference between a clean entry and a sloppy one is the difference between a tidy month-end and a quarter full of adjustments.
Automated journal entry
A journal entry generated by software applying chart-of-accounts rules without human intervention, based on extracted invoice data.
Traditionally an accountant or bookkeeper does it: read invoice, decide account, write entry. Automated: the system classifies the invoice, maps the PGC accounts, and proposes (or posts) the entry ready for review. Human review concentrates on exceptions, not data entry. More context in the pillar guide: what AI in accounting automates and what it doesn't.
Modelo 303 (Spain quarterly VAT)
Spain's quarterly VAT return. Summarises output VAT (sales) and input VAT (purchases) for the quarter.
Filed by companies and self-employed people every quarter (April, July, October, January). The quality of your 303 depends directly on the quality of your invoice register: if an invoice is misposted, the 303 is wrong, and the AEAT cross-checks against the annual Modelo 390.
Modelo 347 (Spain annual third-party return)
A Spanish annual declaration of operations with third parties exceeding €3,005.06 with the same client or supplier in a year.
Filed in February. It requires consolidating every invoice by tax ID to detect who crosses the threshold. It's where most errors surface, because manually-keyed invoices are often miscoded against the wrong supplier.
Modelo 349 (Spain intra-EU operations)
A Spanish monthly or quarterly declaration of intra-EU operations (purchases and sales with EU member states).
Intra-community operations have special rules: reverse charge, VIES VAT-ID validation, strict deadlines. Errors in the 349 trigger near-immediate AEAT inquiries, because they get cross-checked against tax authority data in other EU countries.
A VAT mechanism where the buyer (not the seller) declares and pays the VAT. Applies to intra-EU operations, imports, and certain B2B services.
Instead of paying VAT to the supplier, you record it directly in your own VAT return (Spanish Article 84.1.2º LIVA, Italian Art. 17 c. 6 DPR 633/72). If you misapply it, or fail to apply it when you should, there's a penalty. It's one of the most frequent inspection findings in both Spain and Italy, especially on intra-EU operations declared via Modelo 349.
Bank reconciliation
The process of cross-checking bank movements against recorded invoices to confirm which invoices have been paid.
Manually: you open the bank statement, walk through invoice by invoice, mark them paid. Automated: the system matches by amount, date, and concept, and only escalates conflicts. Traditional reconciliation breaks in three cases: partial payments, batched payments, and transfer fees.
AI auditability · Decision traceability · Explainable AI
The capacity of an AI system to show, for every decision it makes, why it made it and from what data.
An AI system without auditability is a black box. If you can't explain why the AI classified an invoice as utilities or applied reverse charge, you can't defend it under a tax inspection. Auditability is what separates AI you can use in accounting from AI you can use in a demo. Go deeper in the AI in accounting pillar.
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