Broader Context Of Three-Way Matching For Accounts Payable
What Is Three Way Matching In Accounts Payable
The process of accounts payable (AP) is often complex and requires aggregation of various financial data points for effective reconciliation. It can be difficult to accurately track expenses in an efficient and effective way, especially on larger scale. The three-way matching process helps address these challenges in accounting by providing visibility and transparency to each transaction.
A three-way match of an invoice is process used by organizations to ensure the invoice being processed is accurate and valid. It is reconciliation of the purchase order (PO), the goods received note (GRN) and the supplier invoice. This process is used to maintain control of all types of expenditure, reconcile supplier balances and protect against suspicious activity.
The Value of Automated Three-Way Matching
Organizations must frequently make financial purchases through manual maintenance, resulting in stale and cumbersome processes. Automation of the three-way matching process significantly improves operational visibility, accuracy and efficiency while minimizing the potential for procedural errors or fraudulent activities. By removing manual processes, accounts payable managers can positively influence the organizations bottom line.
Specialized accounts payable automation Softwaresolutions offer tangible benefits over manual solutions. Automated solutions allow for comprehensive data capture for comprehensive invoice processing across multiple types of data sets. This enables control as well as automated processes for validating accuracy and consistency across records.
For instance, if goods are received without corresponding purchase order, accounts payable automation software can quickly identify the discrepancies, allowing corrective action to be taken. It also allows for quick dispute resolutions and can flag invoices which are outside of the preset parameters.
The automation process also helps in standardizing payment terms, dates and discounts across multiple suppliers running simultaneously. This ensures consistency and accuracy across invoice payments. Lastly, automated Softwaresolutions can provide real-time reports for better visibility into the entire purchase process.
Benefits of Three-Way Matching
Three-way matching provides several important benefits to an organizations accounts payable process. It eliminates fraudulent activities by ensuring that appropriate controls are in place to identify discrepancies before any payment is made. Additionally, automated matching also offers an efficient audit trail in case of any fraudulent activities.
Three-way matching also optimizes the matching of invoices, purchase orders, and goods-receipt notes. Automating the three-way matching process helps reduce costs, save time while speeding up the reconciliation process and eliminating manual entry errors. It also reduces the chances of paying late fees or overpaying vendor.
Conclusion
Three-way matching is an essential part of any organizations accounts payable process. Automation of the three-way matching process ensures greater accuracy, control, and compliance while optimizing performance, innovation and operational efficiency. Accounting executives looking for Softwaresolution should take into consideration the benefits of an automated three-way matching system to ensure the best possible results.
