What is Matching?
Matching is a crucial process in financial and inventory management that ensures consistency and accuracy in transactions. It involves comparing documents related to a purchase to verify that they all align before proceeding with payment.
Matching helps ensure that the goods or services received match what was ordered and what was billed. This prevents discrepancies, fraud, and errors, ensuring accurate financial records.
Documents Involved
Purchase Order (PO): This document outlines what has been ordered from the supplier, including quantities, prices, and terms.
Invoice: Sent by the supplier, this document requests payment for the goods or services provided.
Goods Receipt: This confirms the receipt of goods, detailing the items received and their condition.
Types of Matching:
2-Way Matching
Comparison: Involves comparing the invoice to the purchase order (PO).
Purpose: Ensures that the billed amount matches the amount ordered.
Process: Simplified and faster as it involves only two documents.
Use Case: Suitable for recurring purchases where the risk of discrepancies is lower.
Verified 3-Way Matching
Comparison: Involves comparing the invoice, the purchase order (PO), and the Shipping documents/goods receipt.
Purpose: Confirms that the billed amount matches the ordered amount and that the goods were actually received.
Process: More thorough and time-consuming as it involves three documents.
Use Case: Ideal for non-recurring or high-value purchases where accuracy is critical.
3-Way Matching adds an extra layer of verification by including the Shipping documents/goods receipt, which helps in reducing errors, preventing fraud, and ensuring financial accuracy
Learn more about Verified 3-Way Matching
Automated 3 Way Matching
Comparison: Matches items across purchase orders, invoices, and receipts.
Purpose: Ensures that the unit cost and received quantity are consistent across all documents, flagging any variances immediately.
Process: Automated system that reduces time and errors by thoroughly validating all three documents.
Use Case: Best for high-value or sensitive purchases where accuracy is paramount, as well as for ongoing transactions needing efficient validation.
Learn more about Automated 3-Way Matching