Three-way matching with AP Automation

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.   

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."

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?