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How to Streamline AP 3-Way Matching Skip to main content

How to Streamline AP 3-Way Matching

Mon Mar 28, 2016 | Genesis Technologies

Accounts payable departments want a more efficient way to match paper purchase orders with packing slips and other forms of proof-of-delivery (POD) documents and invoices – even if they've already streamlined invoice processing to some degree.

Even if you're using EDI, at least 10-20% of invoices and PODs are received on paper. For many manufacturers, wholesalers and distributors, this can take several hours every day and costs hundreds or thousands of hours of worker productivity.

Referred to as "3-way matching," people ask us if it's possible to streamline this process without it costing a fortune and integrate with commonly used enterprise resource planning (ERP) systems like Oracle, SAP, Microsoft Dynamics GP, AX, SL, Nav and Sage MAS 90? The short answer is yes.

3-Way Matching Scenario Example

Organizations often match invoices with purchase orders using a 4-step process that can take several hours per day, possibly at multiple locations. This process consists of:

  1. Looking up, printing out or physically retrieving the PO from the ERP system
  2. Looking up, printing out or physically retrieving delivery receipt/POD
  3. Looking up, printing out or physically retrieving the invoice
  4. "Stare and compare" the three together

AP Workflow Automation

Using FileBound workflow automation software, you can now do a 3-way match completely electronically by matching invoice line items with the POD and PO.

The degree of automation, integration and streamlining can vary. The first step may be to make "stare and compare" completely electronic with scanned images of the POD and invoice (unless they're received electronically). This requires all paper POs, PODs and invoices to be scanned, which is a module of FileBound but also requires high-speed document scanners (this can be outsourced to a service bureau).

More advanced forms of document capture software can also be used to do automated line-item extraction using optical character recognition (OCR), but this can be cost-prohibitive unless you have volumes of 500 or more invoices per day.

Workflow automation then governs what happens if an item doesn't match as well as the approval process. Workflow then can tie in with your ERP and accounting software so that, once invoices are approved, a check is automatically cut.

It Can Get Complicated...

But it doesn't have to be, especially if you work with us. We can identify the various options from simple to complex, from semi-automated to fully automated. It all starts with a conversation, so contact us today.



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