In the world of accounts payable, three-way matching is king. This process of verifying and cross-referencing expenses using three different documents is essential for preventing fraudulent invoices from being paid, simplifying the auditing process, and ensuring accuracy across all records.
But what is three-way matching exactly? This blog post will break it down for you and explain why it’s so important!
Three-Way Matching Explained
Three-way matching is the process of verifying that all of the information, such as the number of units, the cost per unit, and the total order cost, are accurate across all three documents: the purchase order, the invoice, and the receipt. This action helps ensure that no mistakes were made throughout the transaction and makes it easier to review at a later date.
Two-way matching only checks the purchase order against the invoice, while four-way matching compares the purchase order, the receipt, the invoice, and a packing slip (if one exists).
Why Is Three-Way Matching Important?
There are several reasons why three-way matching is so important in accounts payable. For one, it helps to prevent fraud by ensuring that each invoice is matched with other documentation. This “paper trail” makes it much harder for someone to submit a fake invoice and get away with it.
Additionally, three-way matching simplifies the auditing process. When all of the relevant documentation is stored in the same place and can be easily accessed, it is much easier to review and verify accuracy.
Three-way matching helps prevent common AP mistakes like double payments, overpayments, and underpayments because it ensures that all of the information is accurate before any payments are made.
How AP Automation Can Help
AP automation software can help streamline the three-way matching process by ensuring that all of the relevant documentation is stored in the same place and can even automate many of the checks that would traditionally require manually comparing paper documents.
Manual invoice matching is error-prone and it can drain your payable staff’s time. AP automation software solves these issues with Intelligent Data Capture (IDC).
IDC is a technology-based invoice-matching process that automatically identifies, extracts, and matches critical information from incoming paper and electronic documents, eliminating the need for manual data entry.
Intelligent Data Capture is not only accurate but easy to set up and configure. You can submit a single sample of the common document types you use, and IDC will take it from there. This means you can get your solution up and running quickly without sacrificing any sophistication or flexibility. Because Intelligent Data Capture “teaches” itself, it’s able to adapt as your organization grows and changes.
By investing in Intelligent Data Capture, your organization can save time, money, and resources by no longer having to manually extract data from your documents.
Read more: The Accounts Payable Glossary: Everything You Need to Know About AP Automation
Epicor AP Automation For Effortless Three-Way Data Matching
Epicor AP automation software includes Intelligent Data Capture technology to make two and three-way data matching effortless. With our powerful document management system, you can easily store and retrieve all of your documentation in one place, on the cloud.
An invoice can be easily scanned into the software where it will be automatically matched to the purchase order and receipt. If the given invoice matches the other documents, then it is automatically pushed into the approval workflow for a manager to approve on the go.
If errors or duplicates are found, then the supplier invoice will not be sent through for approval, so your company can rest assured that you won't be losing money on faulty or late payments from human error.
Epicor AP automation software also frees up your payable teams to focus on more important tasks like tracking KPIs to cut invoice cycle times and capture early payment discounts.
As if that isn’t enough, Epicor AP automation software also comes with a full suite of features to streamline your entire accounts payable process from start to finish. These include:
- Fully paperless processes for a greener office.
- Maximum cost savings.
- Centralized document storage.
- Real-time reporting, anytime, anywhere.
- Seamless ERP integrations.
- Accelerated productivity, operational efficiency, and more!
Ready to see how Epicor AP automation solutions can help your organization streamline its accounts payable process? Contact Us to get started with a demo!
