Find out how 3-Way Matching with AP Automation speeds up invoice processing, minimises errors and saves costs. Find out how your organisation can benefit!
What it is
The invoice is compared with the purchase order and the goods receipt.
Why
Deviations surface before anything is paid.
When two
Without a goods receipt, two-way matching remains: invoice against order.
You receive an invoice and attach it to the purchase order. Does the invoice match what you ordered? Did your supplier bill differently? Have the goods ordered already been received or are they yet to be entered? It saves you a lot of processing time if the invoice matches what you ordered.
Automatic interface
With AP Automation, invoices are automatically matched and booked against purchase orders. Purchase order header and line positions are retrieved through an automatic interface with ISPnext's ERP system or the Procurement solution. We use both two-way and three-way matching for this purpose.
Matching is based on matching tolerances. In case of a match, the invoice is automatically booked into the ERP system without approval. Matching can be based on header and/or line level. In the event of a mismatch, the invoice is automatically presented to the organisation for processing. Administrative processing can take place subsequent to explaining the differences and making a decision regarding the invoice.
AP Automation in 5 steps
Discover in five steps how to automate your accounts payable process.
Three-way matching with AP Automation
If goods or services were received, three-way matching is performed. When setting up three-way matching, three types of documents are referenced for verification:
- Incoming invoice from your supplier
- The purchase order you placed
- Booked goods receipt from your ERP system
Through the use of matching, comparisons are made easily and quickly on invoice components such as order numbers, quantities and prices. With three-way matching, you establish a uniform business process that is very accurate, reliable and is a time saver.
Arie van Arkel, controller at IBK Group says: ''The logistics invoices go through the system via a three-way match. In doing so, ISPnext matches the incoming invoice with the order number and receipt records by price and quantity. If this matches, the invoice is automatically made payable without any further time spent by the accounts payable department. This, of course, means substantial savings in labour time."
“In doing so, ISPnext matches the incoming invoice with the order number and receipt records by price and quantity.”
Two-way matching with AP Automation
When there are no receipts, this is recognised in the purchase order and matched with the line positions of the purchase order (two-way matching).
Want to know more about two-way and three-way matching?
