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Most companies do some form of matching of vendor invoices to purchase orders and/or goods receipts. This is called a 2- or 3-way match.
The process can require a great deal of manual effort, particularly if the invoiced items have to be matched at the line level.
Once an invoice is entered into an ERP it is assigned a “match/no match” status. If, for any reason, there are price differences or problems with the goods receipt, the invoice cannot be processed by the ERP. Users or knowledge workers typically have to cancel the transaction, and then perform time-consuming manual work to clear the exception. This usually involves the purchaser, the receiver and sometimes the vendor.
ERPs do not have an automated way of handling these exceptions and in many cases companies may spend days trying to clear up the differences between purchase orders and invoices.
Procurement software companies claim they can “automatically match” these documents – but what makes that possible? Accounts payable three-way match.
First, let’s get up to speed:
All of this information is visible in one intuitive, user-friendly dashboard.
Second, in most companies accounts payable staff do not have the data or knowledge of the purchase to be able to clear an exception
This is where the manual process slows things down.
Whereas the AP staff member might not have the information at hand, Intelligent 3-Way Match isolates the problem that is preventing a proper match.
Using PO and goods receipt data, Intelligent 3-Way Invoice Matching determines a proper workflow by identifying the purchasing specialist or other knowledge workers who have the authorization to address the exception and delivers them a “package” of information—including an email alert—streamlining the matching of vendor invoices.
Rillion’s AP Automation Suite includes Automated 2 and 3 Way Matching, read more about that here.
Efficient mobile approvals
Once delivered, the recipient views the package of information which includes an invoice image, a copy of the PO, the goods receipt information, and a description of the error. This package of information is presented in a single dashboard on the recipient’s laptop or mobile device. It gives the knowledge worker all the tools and services they need to manage the exception in the 3-way match, such as ad-hoc routing capabilities to colleagues and email and/or portal communications with vendors.
When the knowledge worker is done, they can return the corrected invoice package through the dashboard back to the matching engine, clearing the exception.
All of these steps (including the communications) are tracked and recorded in the accounts payable three-way match, creating an audit trail visible to auditors and regulators.
The non-PO invoice arrives with no accounting data on it, and no PO to assign the account codes from. To handle this, intelligent scanning technology classifies each invoice when it captures the data. It asks the following:
3-Way Match can greatly shorten the payment cycle and improve the productivity of all the users in an organization. See how it fits in with Rillion’s AP Automation solution
What is 2-way and 3-way matching in accounts payable?
2 and 3 way matching in accounts payable is the matching of a purchase order to an invoice, or matching a purchase order to an invoice and a goods receipt.
What is 3 way match with example?
A 3 way match example is when someone in an organization orders goods, and issues a purchase order. Once the goods arrive the invoice is checked against the purchase order to ensure the agreed upon quantity and amounts are the same. The goods receipt is also matched to ensure the goods specified in the purchase order and invoice were delivered.
What is 3 way matching principle in accounts payable in SAP?
3 way matching using the SAP accounting system or ERP is the matching of a purchase order to an invoice and a goods receipt.
Does 3 way match include invoice?
Yes because the purchase order and goods receipt is compared against the invoice related to the purchase.
How does 3 way match benefit your business accounts payable processes?
3 way matching benefits a business because it ensures that the goods and services that were ordered were received and the price agreed upon were charged on the invoice.
Schedule a free consultation with one of our AP experts.
At Rillion, we provide accounts payable automation (AP Automation) to organizations in over 50 countries worldwide. Over 95% of Rillion customers feel that the platform fulfills expectations and consider Rillion to be a worthwhile investment, noting its ease of use and great support.
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