What is Invoice Matching? 2-Way vs 3-Way Matching Explained

Knowing who is responsible for each step keeps everyone on the same page, ensuring smooth coordination. Rillion’s automated matching solutions support two-, and three-way matching, helping companies streamline AP processes and minimize manual oversight across various industries. Invoice matching can take three main forms, invoice matching each offering a different level of control and accuracy in ensuring invoices align with relevant purchase documents. Have you ever wondered how much time and resources your business could save if invoices matched up without manual effort? Explore strategies to prevent errors, detect fraud, and maintain accurate financial records.

Automotive: Ensuring quality control with a 4-way match

• With our invoice matching software, you can also automatically cross-check the details captured above against company records, verifying that vendor info, PO numbers, and amounts are correct.
• Comparing the three critical documents in this process ensures an invoice is legitimate.
• You may fall for fake invoices that closely resemble legitimate ones but with modified payment details.
• Looking ahead, continued advances in artificial intelligence and machine learning promise even greater automation potential, enabling predictive analytics and strategic cash flow optimization.

The process begins when an employee generates a purchase requisition to request goods or services, whether through a corporate card purchase or direct vendor billing. Once approved by a supervisor, the purchasing department creates a formal purchase order specifying quantities and prices. This purchase order is sent to the vendor, who fulfills the order and generates an invoice.

Supplier Relationships

• Your AP staff would end up spending more time reconciling data and resolving discrepancies.
• Two-way match is an essential tool for ensuring that mistakes, discrepancies, or outright dishonesty don’t result in incorrect payments made to vendors.
• Its high accuracy rate ensures minimal errors, and it can process hundreds of documents simultaneously.
• The purchasing department will send the order to the vendor who will then fill the order, create an invoice, and send it to the customer.
• AI is about to transform the AP process, but in the meantime, save time and improve security by implementing three-way checking today.

This innovative approach eliminates the need for the accounts payable (AP) team to manually enter invoice data into the system manually, thus mitigating the risk of human errors. Optical Character Recognition employs AI to extract and interpret information from digital documents. Ideal for industries dealing with substantial data volumes, OCR capabilities facilitate efficient data capture and extraction. This streamlined data is then seamlessly matched with purchase orders, automating the invoice matching process. This not only reduces manual efforts but also enhances process efficiency, saving valuable time and costs. Here are some of the reasons why accounts payable teams should perform the process of invoice matching.

• Invoice matching, also known as purchase order matching, is the systematic comparison of invoices with supporting documentation prior to payment processing.
• Additionally, DocuClipper functions as a bank statement converter, seamlessly integrating with accounting systems like Sage, Xero, and QuickBooks.
• The technology extracts key data from invoices and validates it in real time, transforming traditionally time-consuming verification steps into a streamlined digital workflow.
• Much like three-way matching, this process needs a purchase order, receipt of goods, and supplier invoice.
• This is high time to start examining GST compliant ERP systems and GST software and start mapping business processes with these systems.

Use AI to detect duplicate invoices and potential fraud

• The requisition is submitted for approval by a supervisor and the purchasing department.
• This streamlined data is then seamlessly matched with purchase orders, automating the invoice matching process.
• Gain full visibility into every transaction, streamline AP, and ensure payments are accurate—without spending hours on invoice matching.
• Integration with major ERP platforms enables seamless data flow, while customizable validation rules adapt to specific vendor profiles and transaction types.
• It has to be the exact amount the purchasing department authorized on the purchase order.
• Yes, but manual invoice matching is time-consuming and prone to errors.

Invoice matching can help identify invoices outside of normal limits by setting up tolerances for invoice amounts and quantities. Once all three components are successfully matched, your invoice is entered into the accounts payable system for processing. The purchase order, goods receipt, and supplier invoice must Interior Design Bookkeeping match each other within the specified tolerance levels. You’ll find benefits and drawbacks in both 2-way and 3-way match processes.

This process helps prevent errors, fraud, income summary and overpayments while ensuring timely and accurate payment to suppliers. Invoice matching is a crucial process in accounts receivable and payable management, where businesses compare and reconcile invoices to purchase orders and goods receipts. This ensures that the details of the invoice align with the initial agreement and the actual goods or services received. The goal of invoice matching is to verify the accuracy and legitimacy of each transaction, preventing errors, fraud, and overpayments. Whether manual or automated, invoice matching strengthens your accounts payable process, ensuring timely payments and better cash flow management.