Three-way matching with AP Automation

You receive an invoice and attach it to the purchase order. Does the invoice match what you ordered? Did your supplier bill differently? Have the goods ordered already been received or are they yet to be entered? It saves you a lot of processing time if the invoice matches what you ordered. 

Automatic interface

With AP Automation, invoices are automatically matched and booked against purchase orders. Purchase order header and line positions are retrieved through an automatic interface with ISPnext's ERP system or the Procurement solution. We use both two-way and three-way matching for this purpose. 

Matching is based on matching tolerances. In case of a match, the invoice is automatically booked into the ERP system without approval. Matching can be based on header and/or line level. In the event of a mismatch, the invoice is automatically presented to the organisation for processing. Administrative processing can take place subsequent to explaining the differences and making a decision regarding the invoice.  

Three-way matching with AP Automation 

If goods or services were received, three-way matching is performed. When setting up three-way matching, three types of documents are referenced for verification:

Incoming invoice from your supplier
The purchase order you placed
Booked goods receipt from your ERP system

Through the use of matching, comparisons are made easily and quickly on invoice components such as order numbers, quantities and prices. With three-way matching, you establish a uniform business process that is very accurate, reliable and is a time saver.

Arie van Arkel, controller at IBK Group says: ''The logistics invoices go through the system via a three-way match. In doing so, ISPnext matches the incoming invoice with the order number and receipt records by price and quantity. If this matches, the invoice is automatically made payable without any further time spent by the accounts payable department. This, of course, means substantial savings in labour time."

Two-way matching with AP Automation 

When there are no receipts, this is recognised in the purchase order and matched with the line positions of the purchase order (two-way matching). 

Want to know more about two-way and three-way matching?

AP Automation in 5 steps

Download the whitepaper AP Automation in 5 steps and learn how to transform your accounts payable processes. Discover practical steps to save time, reduce errors, and gain control over your invoice management. Start streamlining your AP processes today!

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