Maximizing Operational Performance Through Accounts Payable Automation
3 Way Match Of Invoice
Current accounting software options enable organizations to maximize operational performance by streamlining financial transactions through sophisticated algorithms that include three-way match of invoices.
To start, let’s explain what three-way match is. three-way match requires that three separate documents?the purchase order, goods receipt, and suppliers invoices?all be reviewed for accuracy before the invoice is paid. This process requires high degree of accuracy, as any discrepancies in the documents can delay the payment process. To streamline the process, accounts payable automation software utilizes software algorithms and artificial intelligence to review the documents, search for matching data, and trigger payment when the documents have been verified.
For any finance executive looking to leverage accounts payable automation software to improve operational performance, it is essential to understand the ins and outs of three-way matching. There are several different types of three-way matching, depending on the level of compliance that the organization wishes to achieve.
The most efficient type of three-way matching is the partial match. This process verifies that the PO and GR documents have been received and read, and the invoice data have been entered in the system. Any discrepancies in the data are automatically flagged by the software and reviewed prior to payment. Partial matching significantly streamlines the invoice review and payment process, reducing processing times from days or weeks to just few hours.
A two-way match, or purchase order to invoice matching, requires that the software compare the purchase order and the invoice, but does not require the goods receipt document. This type of verification is often used for transactions that require extremely fast payment turnaround, such as the purchase of trade show items or electrical components for an engineering project.
A three-way match, or purchase order to invoice discrepancy matching, requires that the software compare all three documents to ensure the accuracy of the payment. This process includes an additional level of compliance and review as it is more comprehensive and takes more time.
The key to maximizing operational performance with three-way matching lies in implementing the right accounts payable automation Softwaresolution. Organizations should look for solutions with scanning capabilities, sophisticated algorithms, and multi-format document imports to verify the accuracy of payments. Additionally, finance executives should ensure the software they select is compliant with their organizations accounting processes and standards.
In summary, accounts payable automation software featuring three-way matching capabilities is essential for any organization that wishes to streamline invoice processing and maximize operational performance. Selecting the right Softwaresolution and understanding the nuances of three-way matching will ensure that the software implementation is successful and the organization can reap the maximum benefits from their accounts payable automation system.
