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About PO-matching

Invoice matching is an important step in the purchase-to-pay process. Find out why.
Caroline Nys
Caroline Nys
Consultants at work

What is PO-matching?

PO-matching. Simple, right? After placing an order you will receive the goods or services and afterwards you will also receive an invoice. The invoice is matched with the order and… done!  

If it only was that simple. Because matching invoices is a complex task that becomes particularly time-consuming when discrepancies are detected.

What is invoice matching?

Matching is done between 3 pieces of data: the order, the delivery and the invoice. Hence the name ‘three-way matching’. Three-way matching links the invoice to one or more orders (or purchase orders) and to the registered deliveries (or receipts) of the goods or services.  Then the information on the invoice is matched against the agreed prices and quantities received. If the invoice meets the expectations, it can be automatically posted, approved and paid. If the invoice deviates, manual intervention will be required to deal with it.

Invoice matching is an important step in the purchase-to-pay process. It not only ensures correct payment for delivered goods or services but is an important support tool in case of control or audit of the accounts.

Why matching invoices is such a challenge

There are many challenges that can make matching complex. Some examples:

 

  • Several orders are collected on 1 invoice.
  • The invoice contains only a partial delivery or partial purchase of a grouped purchase order.
  • Goods appear not to have been delivered or returned because of quality problems.
  • Article numbers have been changed by the supplier and therefore no longer correspond to the data in the ERP system.
  • The supplier invoices in different quantities than you order (what was ordered in pieces is invoiced per dozen or running meter vs. kg).
  • The price is incorrect because you used an old price, or a price with a discount that you are not entitled to.
  • The invoice contains unexpected or unknown costs (such as transport costs, diesel surcharges, taxes, …) that make a perfect match impossible.
  • There is no order reference on the invoice.
  • No order has been created.

It is extremely time-consuming to find out the cause of every discrepancy between order, delivery and invoice, the more so as this information is usually spread across different modules or screens within ERP applications. The information to accept or reject the discrepancies with reason is also usually to be found in different people (purchasing, logistics, QC, finance, warehouse…)

How RecoMatics Document Suite automates the process from purchase order to invoice payment

RecoMatics Document Suite features a powerful module for data extraction on invoices. This of course allows all invoice information to be collected at header level but RecoMatics Capture also allows individual invoice lines to be recognised and their relevant data determined.

The data from the invoice lines is then compared not only with the information available within the ERP system regarding quantities ordered and prices charged but also with the delivery information. Via fuzzy logic, RecoMatics Capture can link one or more invoice lines to one or more delivery/order lines.

You can choose between 2-way matching (between invoice and order), 3-way matching and even 4-way matching (between invoice, order, delivery and quality control). This can be done at both header level (total amounts) and line level (invoice and receiving lines).

Thanks to built-in tolerances, minor discrepancies can be automatically accepted and booked.

For larger discrepancies, a handling workflow is automatically initiated that sends the invoice to the correct handlers, depending on the type of discrepancy (price, quantity, etc.).

This not only reduces the cost of manual work, but also shortens the approval process from days to hours.

Only with end-to-end matching are you able to successfully complete the purchase-to-pay process every time and improve your bottom line.

Are we a match?

Contact us and together we will see what we can do for you.

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