Which SAP documents are compared in the three way match process for an order?
We know, as entrepreneurs and businesspeople, that an organization is an ecosystem of processes. And whether within human resources, the marketing team, or sales, these processes (when streamlined and working) are the very elements that ensure the business ecosystem maintains harmony, internally. Show
There’s one corporate organism within an enterprise’s ecosystem, though, that perhaps relies more heavily on processes that are more focused, carefully managed, and systematic – the accounts payable department. It’s easy to see why – this is the money-out function. The department that approves payments for bills outstanding. Accounts payable, up until quite recently, has been a largely manual process, miring the work in tedium and inefficiencies, and opening a business’s record-keeping up to costly human error. The rise of artificial intelligence (AI), though, has been monumental in making accounts payable faster, more accurate, and infinitely more secure. It stands to reason, then, that heavy vetting in this area of the business is a crucial element. A 3-way matching process has been in practice in this regard for quite some time. But there’s innovation here – a way to make that 3-way matching faster, more streamlined. And that’s in its automation. But what is 3-way matching in accounts payable? Let’s unpack the process here. What is 3-way matching?Simply put, 3-way matching process is checking that three specific pieces of documentation in an invoice paying process, correspond. These pieces of documentation are the three steps to an order or request of goods or services by a business to a supplier. This is how it’s broken down:
When these three documents are in circulation, and the details of the order or purchase correspond, then the buying business can release payment. And that, essentially, is a 3-way matching process. How does 3-way matching in accounts payable work?3-way matching is a process put in place to ensure that the correct invoice is being paid. The three documents that are matched are the purchase order, the goods receipt, and the invoice. All three documents must match in order for the payment to be processed. Here’s a quick breakdown of the process:
How can three-way matching improve your business?So, it may seem like many steps in a simple checklist. But, as with all tasks associated with the money-out side of an organization, establishing elements in the list that are procedural and locked in, will always safeguard the bottom line of a business. A matching process, when done right, will benefit a business in the following ways:
What are the disadvantages of using manual 3-way matchingThe 3-way matching process can be time-consuming, but it is essential for ensuring accuracy in accounts payable. When setting up 3-way matching, it is important to have a system in place that can track and match all three documents. This can be done manually, but there are some disadvantages to using a 3-way matching system that isn’t automated. They include:
With accounting automation software, this process is entirely automated, eliminating the need for human interaction (apart from perhaps a cursory glance to ensure form fields are correct), and thus speeding up the process, while significantly reducing costly human error, or spurious invoice payments. What are the advantages of using automated 3-way matchingThe automated 3-way matching process can help to prevent fraud and errors in accounts payable. By matching all three documents independently of human input, it ensures that the correct invoice is being paid for the correct purchase. This can help to avoid overpayment or underpayment of invoices. Enhancing the 3-way invoice matchingMany business owners, when considering an organized 3-way matching process, inevitably envision time wasted in the accounts department, as accounting professionals sift through reams of paperwork to ensure the accuracy of each invoice. This was true – not anymore, though. There’s a way to enhance the task, and it effectively halves time and increases accuracy ten-fold. How? Through automation. Smart artificial intelligence (AI) can verify invoices in a 3-way matching process that takes minutes instead of days, and without the need for human interception – reducing error. DOKKA’s smart AI does just that for your business. And what’s more, it’s a software add-on that plugs in seamlessly with your existing enterprise resource planning software, to simply make your accounting processes better. How automated three-way matching can benefit your businessWhen it comes to matching invoices, there are a few key things you can do to make the process easy and headache-free. With the right tips and tools, you can perfect the invoice matching process and make it a breeze. Here are a few top tips to keep in mind:
Following these tips will help you match invoices like a pro. With the right tools and a little bit of practice, matching invoices can be a breeze. Need help automating your AP processess?DOKKA is an AI-powered accounting automation app that integrates with your accounting system and automates invoice data capture, approval flows and centralizes document management. Trusted by 2,500 companies worldwide. What is 3 way match concept in SAP?A three-way match is an accounting control that ensures that the purchase order, inventory receipt, and invoice all match in terms of product, quality, quantity and price. The process starts when purchasing creates an order and sends it to a vendor.
Which of the following is included in a three way match?A three-way matching is the process of matching purchase orders (PO), goods receipt note, and the supplier's invoice to eliminate fraud, save money, and maintain adequate records for the audit trail.
What are the 3 documents required to process a purchase order payable?There are three documents that are integral for managing payments through accounts payable: invoices, order receipts, and purchase orders. Prior to being fulfilled, accounts payable scrutinizes the details of each of the three documents to verify that the product received matches what was ordered via the order receipt.
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