A company often deals with a number of vendors to procure a variety of goods and services to run business operations. The procurement departments of a company release Purchase Orders in order to procure goods from a vendor. The vendor supplies goods and raise Invoices against the supplied goods.
The person or the team that receives goods from a vendor needs to enter the details or the Packing List Information into the company’s PO system. The details entered into the system helps the accounts payable team to confirm that the same goods have been supplied by the vendor, which have been ordered for.
Thereafter, the AP department receives an Invoice for releasing the payment. But in order to release the payment, the AP needs to match the Purchase Order, Invoice and the Delivery Note. This 3-way match is important to ensure that the payment is released appropriately and without causing any unnecessary delay.
However, the AP department often faces several types of challenges when it comes to achieving a 3-way match, particularly when it receives invoices in the paper format or via email. The task of the 3-way matching can easily be accomplished with an e-Invoicing system in place. It expedites the process and makes sure that the payment is released in time without any discrepancy.
The e-Invoicing system makes the whole task less cumbersome and effortless. The AP team needs not to scan through each paper invoice and match the particulars manually with the delivery note and the purchase order. In a company, where hundreds types of goods are procured from dozens of vendors, the manual matching process may prove time-consuming and also will be prone to errors. Any discrepancy may cause monetary losses to a company. Thus, implementing an e-Invoicing system can not only make the process smooth, but it can help save both time and cost.
An e-Invoicing system together with a cloud based SaaS solution can make the 3-way matching task very simple for the AP department. Moreover, it can be integrated with the ERP system to complete the process in an automated environment. The system can function in the following manner:
- The SaaS based matching automation solution can quickly match the PO information.
The information related to the goods receipt can be entered into the PO or the ERP system. The information is then matched by the matching automation solution of the AP.
When the AP receives e-Invoices, the automated system concludes the third-part of the matching. There is no need of manual checking, since the invoice is generated directly from the billing system of the vendor.
Thus, an e-invoicing process can effectively perform the 3-way matching process for an error-free and speedy payment processing. It eliminates the chances of human error and all the discrepancies that a manual invoice system may have. The system could prove significantly beneficial for an organization that deals with a number of vendors and procures several types of goods from them every month.