Before accepting a supplier's invoice for payment, it is customary to do a "three-way match process," which involves matching the purchase order, the goods receipt note, and the supplier's invoice. A three way match process may be used to decide whether or not to pay an invoice in whole, or in part. Procurement three-way matching is a control that can help organizations to avoid paying for goods or services that were never received, or that do not match the original purchase order.
When an organization orders goods or services from a supplier, a purchase order (PO) is created. The purchase order contains details about the goods or services being ordered, the price, and delivery terms. Once the goods or services have been received, a goods receipt note (GRN) is created. The GRN includes details about the goods or services received, as well as the quantity. Finally, when the supplier sends an invoice to the organization, it includes details about the goods or services billed, as well as the price.
The three-way match is a comparison of the purchase order, the goods receipt note, and the supplier invoice to ensure that they all match. This can be done manually, or by using accounting or procurement software. If there are any discrepancies, they can be investigated and resolved before the invoice is paid.
The three way match process is an important part of the procurement process, and can help to prevent overspending and fraud. It is a simple control, but can be very effective in ensuring that only goods and services that have been received and approved are paid for.
What are the elements of a Procurement Three Way Match Process?
The three elements of a procurement three way match are the purchase order, the goods receipt note, and the supplier invoice.
Purchase order: The purchase order is a document that is created when an organization orders goods or services from a supplier. It includes details about the goods or services being ordered, the price, and delivery terms.
Goods receipt note: The goods receipt note is a document that is created when the goods or services have been received. It includes details about the goods or services received, as well as the quantity.
Supplier invoice: The supplier invoice is a document that is created when the supplier sends an invoice to the organization. It includes details about the goods or services billed, as well as the price.
How is a procurement 3 way match done?
A Procurement 3 Way Match can be done manually, or by using accounting or procurement software. If there are any discrepancies, they can be investigated and resolved before the invoice is paid.
Possible Discrepancies
Price: Does the price on the purchase order match that of the invoice?
Quantity: Does the quantity on the PO match that of the what was received on the goods receipt? Does the invoiced quantity match the amount on the goods receipt?
Product: Does the part numbers and description on the PO match the goods receipt? Does the invoice have the correct part numbers and description as the PO and goods receipt?
What Are the types of procurement software to perform a procurement 3 way match?
There are many types of software that can be used to perform a Procurement 3 Way Match. Some examples include:
-SAP Ariba
-Oracle Procurement Cloud
-Coupa Procurement Software
-Ivalua Procurement Platform
-Jaggaer Spend Management Solutions
Can Procurement Software make 3 way matching more efficient?
Procurement software can make 3 way matching more efficient by automating the process. This can help to reduce errors and improve accuracy. Procurement software can also provide visibility into the Procurement process, which can help to identify areas for improvement.
What are the benefits of automating 3 way matching with Procurement Software?
The benefits of automating 3 way matching with Procurement Software include:
- Reduced errors and improved accuracy
- Increased visibility into the Procurement process
-Improved efficiency
What are the challenges of automating 3 way matching with Procurement Software?
Some of the challenges of automating 3 way matching with Procurement Software include:
- Implementation and integration challenges
- User adoption challenges
-Data quality issues
Conclusion:
By better understanding the stakeholders involved in the 3 way matching process, you can help alleviate a typical bottleneck in the procurement process. Ensuring that the purchase order, goods receipt, invoice information match will ensure prompt and accurate payment to your supplier. You can read more about similar best practices in procurement here.
Comentários