Automated PO Matching-How It Works and Why It’s Important

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PO matching, or purchase order matching, is the process of matching a customer’s purchase order to a supplier’s invoice to make sure all the information correctly lines up. Not all companies use purchase orders, but they are widely popular amongst industries such as manufacturing and restaurants. While purchase orders can be a significant tool for accounts payable, the process of matching POs with invoices manually is incredibly time consuming. With enterprise-level automation, POs are automatically matched with invoices and checked for accuracy. Automated PO matching saves the accounts payable department valuable time, along with significantly lowering the chances of AP fraud.

2-Way PO Matching

With 2-way purchase order matching, the automation solution will compare a supplier’s invoice with the customer’s purchase order. If a supplier keys in an invoice through the supplier portal, the invoice can only be submitted if their invoice aligns correctly with the purchase order. With file upload or mailed invoices, the solution will show an error message for non-matching POs and invoices, whether it is quantities, units of measurement, currencies, or terms. When this error happens, the invoice is put into match exception, where it is reviewed by AP.

3-Way PO Matching

With 3-way PO matching, automation takes an extra step to safeguard the payment process. 3-way PO matching compares the purchase order, the supplier’s invoice, and the customer’s receipt. If the customer chooses, payment will only be submitted if all three of the documents properly align. If there is a discrepancy amongst any of the information, the invoice will be flagged as a match exception. Not all automation solutions offer 3-way matching, but it is an important extra measure that accounts payable can take. Typically, you will see this feature available amongst enterprise-level solutions.

Fraud Prevention

Verifying POs is a highly effective defense against accounts payable fraud. When POs are verified, that means that duplicate payments won’t accidentally be issued. Also, by ensuring that there are no discrepancies between the customer and supplier’s information, accounts payable won’t accidentally issue money to suppliers for goods that were never received. While advanced AI takes care of the majority of the process, the match exception feature ensures that no fraudulent invoices will be able to slip by accounts payable.

The Benefits of Automated PO Matching

With automated purchase order matching, your company as a whole is better protected against overpayment and fraudulent invoices. This level of protection makes for a smoother AP process and satisfied company executives. Along with a satisfied company, PO matching can improve supplier relationships by ensuring honest communication between customer and supplier. Enterprise-level automated PO matching also guarantees less manual time spent on matching for accounts payable, so the department can now turn its focus to more meaningful tasks.

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