ǞǞǞ three way matching process is a critical internal control mechanism in accounts payable that ensures that payments are made only for goods and services that have been properly ordered and received. This process involves matching the purchase order (PO), the goods receipt, and the supplier’s invoice. While three way matching helps prevent fraud and errors, it can also present several challenges.
In this post, we will explore common problems encountered in the three way matching process, as well as provide solutions to address them effectively.
Understanding Three Way Matching
Three way matching is designed to ensure that:
- Purchase Orders (POs): Confirm the items ordered and their agreed-upon prices and terms.
- 货物收据: Verify that the items ordered were received in the correct quantity and condition.
- 发票: Ensure that the invoice from the supplier matches the PO and the goods receipt in terms of quantity and price.
This process helps organisations verify that they are paying for what they ordered and received, thus safeguarding against overpayments, duplicate payments, and fraud.
Learn more about B2BE’s Three Way Matching solution.
Common Problems In The Three Way Matching Process
1. Discrepancies in Data
One of the most common problems in three way matching is discrepancies between the purchase order, goods receipt, and vendor invoice. These discrepancies can arise due to differences in quantities, prices, or descriptions of goods and services.
To reduce these discrepancies, automated matching software use advanced algorithms to detect inconsistencies and flag them for review. Additionally, standardising data entry practices across departments can help minimise errors.
2. Delays in Document Availability
Delays in receiving the necessary documents for three way matching can slow down the entire accounts payable process. If the purchase order, goods receipt, or invoice is not promptly available, it creates a bottleneck.
Therefore, encouraging timely documentation and using electronic document management systems can help ensure that all necessary documents are available when needed. Setting up automated reminders and workflows can also expedite the submission of documents.
Watch our video round-up below:
3. Manual Processing Errors
Manual data entry and matching are prone to human error, leading to mistakes that can affect the accuracy of the three way matching process.
Automating the three way matching process reduces the likelihood of human error. Implementing reliable AP automation software that integrates with your ERP system can streamline data entry and matching.
4. Handling Exceptions
Exceptions occur when the data on the three documents does not match, requiring manual intervention to resolve. These exceptions can be time-consuming and may lead to payment delays.
Establishing clear exception handling procedures, using automated exception management tools, training staff effectively, and using machine learning predictions can help resolve discrepancies quickly.
5. Lack of Visibility and Control
Limited visibility into the three way matching process can make it difficult to identify and address issues promptly. This lack of control can lead to inefficiencies and increased risk of errors.
A comprehensive accounts payable solution with real-time reporting and analytics can provide better visibility and control. Dashboards and customisable reports can help track the status of invoices, identify bottlenecks, as well as monitor key performance indicators (KPIs).
6. Vendor Disputes
Discrepancies between the documents can lead to disputes with vendors, potentially damaging business relationships and delaying payments.
Regularly reviewing and updating vendor contracts to include specific terms for invoicing and delivery can reduce misunderstandings. Additionally, maintaining a collaborative approach to resolving disputes can help preserve positive vendor relationships.
总结
In conclusion, the three way matching process is essential for ensuring the accuracy and legitimacy of payments in accounts payable. However, challenges such as data entry errors, missing documents, discrepancies, delayed approvals, complex supplier agreements, and lack of system integration can hinder its effectiveness.
关于B2BE
B2BE在全球范围内提供电子供应链解决方案，帮助企业更好地管理其供应链流程，提供更高的可视性、可审计性和控制性。我們以對工作的熱情為動力，以創新為靈感，以豐富的知識為依托。B2BE团队拥有20多年的经验，在世界各地开展工作。
欲了解更多信息，请访问 www.b2be.com.