Tim Robertson

Defining 3 Way Matching

“3-Way” refers to the three documents that make up the match process: The supplier’s invoice which has been received and will go into the accounts payable process when approved; the purchase order that initiated the purchase; and the goods receipt or receiving report that shows proof of delivery.

“Matching” refers to the comparison of the terms, pricing per unit, quantities, etc. that appear on the vendor invoice, to the data on the purchase order and the actual goods received.

After the invoice has been validated by the three-way match process, the invoice can be put into an AP workflow to be paid.

3 Way Matching for NetSuite

Three-way matching is a very important business function for NetSuite enterprise users. The amount of time and effort it takes to do it manually can be a little daunting, especially if there are large volumes of invoices to match.

Fortunately, there is an automated platform for 3 way matching that integrates quite nicely with NetSuite. Invoices, purchase orders, and receipts are matched automatically, and exceptions are flagged for reconciliation. The cloud-based software not only ensures the accuracy of the data, it also provides an audit trail as well.

One of the first things auditors look at in the audit process are purchase orders, invoices, and goods receipts. So automated invoice matching is a good thing not only for the AP department, but in protecting the organization from interruptions and penalties.

Automated invoice matching and processing (also called AP automation) is usually priced based on invoice volume rather than the number of users, so the cost can be quite economical, even in very large organizations.

Some other features include:

• Automatic management of variances
• Pre-defined rules and lines
• Matching at both the line level or total level
• Matching invoices/POs with hundreds of lines
• Import external POs

Once invoices are matched, they are sent directly to NetSuite for recording and payment. 3 Way Matching is a module in EchoVera’s AP Automation for NetSuite

More information about automated 3 way matching for NetSuite here.

Or get more information about automated 2 and 3 way matching for Oracle E-Business Suite here.

…..
3-way invoice matching is available for NetSuite users who want to automate the process – and it rocks!

Cloud software that automates the 3 way matching of invoices, purchase orders and goods receipts which seamlessly integrates with NetSuite has been developed by an AP Automation platform with 3,500+ customers and over 250,000 users worldwide. This is good news for NetSuite users who are looking to automate the 3 way PO matching process in their accounts payable.

What is a 3-Way Match? (or 3 Way PO Matching)

Three way matching refers to the processing of three essential documents: the purchase order that initiated the action, the original supplier invoice which will go into an accounts payable workflow when approved, and a receiving report or goods receipt that shows the goods were received.

An optimal 3 way invoice matching solution should include:
• Intelligent OCR that intuitively extracts data from both paper and emailed vendor invoices;
• Invoice processing with automated approval workflow
• A cascading matching engine that automatically matches invoices and purchase orders at the header or line level
• The ability to handle both internal and external purchase orders

So How Does 3 Way Invoice Matching Work?

Incoming vendor invoices are automatically matched against their corresponding PO at the header or line level according to predefined rules and tolerances. Any invoices that are matched within these approved tolerances are sent directly to NetSuite for recording and payment.

To compare, where manually matching POs to invoices may take 15 minutes to an hour, EchoVera’s PO matching engine does it within minutes – making it a touchless process.

Users control what happens to invoices that don’t match with an automated, predefined (or ad hoc) approval workflow.

———————————————-

The exceptions workflow sends all of the relevant documentation (invoice, PO, goods receipt and team notes) to the proper approver in the organization. Approvers can review the information and approve with one click on a mobile device or in email. Inherent in this process are:

• pre-defined rules and limits
• automatic management of variances
• matching at total and line levels
• the ability to process invoices and POs with multiple pages and hundreds of lines

Intelligent 3 Way Match is a module inside EchoVera’s AP Automation for NetSuite which includes:

• Data capture of both email and paper invoices
• Automated approval workflow
• PO matching
• Searchable invoice archive
• Time stamped audit trail

Pricing is based on invoice volume as opposed to the number of users – meaning no user licensing costs. It’s a secure cloud platform that lets you select what you need, and add functionality as the organization grows. Seamless integration and mobile capabilities are included.

For more information about 3 Way Match for NetSuite click here.

…
Enterprises using QAD, Infor, and Epicore ERP software are discovering the value of using Intelligent OCR in order to capture invoice information accurately and automatically. It saves time and money, is cost effective, and the software can be cloud-based – what’s not to like?

It’s important, however, to make a distinction between OCR and Intelligent OCR, as they have vastly different capabilities.

Some Context: How OCR Has Evolved Over Time

1. Optical Character Recognition (OCR) – 1978
The development of OCR for use in AP departments. Scans paper invoices. Data is entered manually.

2. Template Optical Character Recognition – 1993
OCR development takes a step farther – the technology detects an invoice type by using the configuration of its layout.

OCR plays an integral role in accounts payable automation. It has both automated and manual functions. In larger organizations, invoices are scanned and then “field-mapped”, where employees spend time mapping out the data fields for each type of invoice. Financial staff perform data collection as well by manually selecting each data zone in the invoice.

3. Intelligent OCR – 2016
Intelligent OCR recognizes invoice layouts and invoice fields intuitively, eliminating a large percentage of field-mapping and/or manual data selection. It has intelligent tagging that uses a database to store unique/common field data.

Intelligent OCR automates the field mapping and data collection functions. It detects and learns where essential information is, using invoice page layouts and data fields, allowing for the scanning and importing of uniquely complex invoices and the associated data. It also allows users to search for common values on an invoice and document it, tag it, and then store it in a database.

Avoiding Legacy Code

Intelligent OCR is a new development, and offers to make AP financial operations very efficient. But enterprises need to be vigilant about which platform they choose. Often software companies will buy or acquire OCR and scanning software and hack products together using legacy code. Customers end up buying old technology that’s playing “catch-up”. So it’s a good idea to seek out software that is built from the ground up, using the latest technology platforms and code.

Find out more:
Intelligent OCR for QAD
Intelligent OCR for Infor
Intelligent OCR for Epicor

Avoid outdated OCR technology when choosing an optical character recognition solution for supplier invoices.

…………………….
Organizations with one of the world’s most popular ERPs are considering making their operations more efficient by using Intelligent OCR. But not all OCR technologies are made equal, and most OCR technology is still fairly resource intensive for accounting departments. Why is that?

No denying OCR is very useful in the automation of accounts payable when it comes to processing either paper or email invoices. That’s because data has to be generated from a scanned image of the invoice, and that’s what it does.

The only problem is that a lot of time is spent on field-mapping, where staff have to map out the data fields for each invoice type in the OCR software program they are using. As well, staff also spend time on data collection by manually selecting data zones.

Intelligent OCR solves the manual aspect of this task by automating both field mapping and data collection. It does this by automatically detecting (and learning) supplier invoices based on invoice layouts and data fields, allowing for the scanning and importing of different invoices of varying complexity. Intelligent OCR software also lets a user search for typical values from any document, tag it, and store it in a database.

The Evolution of Intelligent OCR for Sage Intacct

1. Optical Character Recognition (OCR) – 1978

OCR is used to process scanned paper invoices, and then the invoice layouts are manually field-mapped.

2. Template OCR – 1993

OCR that automatically detects the invoice type based on its layout and sorts data accordingly.

3. Intelligent OCR – 2016

Intelligent OCR recognizes both fields and invoice layouts intuitively, dramatically reducing the need for field-mapping and manual data selection. It also allows for intelligent tagging.

AP departments are spending more time looking for ways to optimize their operations, rather than looking for fields in an invoice!

See: Intelligent OCR for Sage Intaact

Image courtesy of http://www.gratisography.com

SIMPLE INVOICE PROCESSING TOOL

Finally! A simple automated invoice processing tool for small business

There are times you want all those invoices streaming into your inbox or piling up on your desk to be transformed – no, not into dollar bills, although that would be nice – into pure data. In other words, just changed to a convenient CSV or XML file.

The way this is done is fairly simple. You send an invoice into a service like InBox, where it takes your paper invoice (that you have scanned) or an emailed invoice (which could be a PDF, Word, or other file) and sends you back an XML or CSV file. Done!

From there you can take the information and plug it into your accounting system or ERP. A great way to save time and money, but what we think is even better, stress and hassle!

Processing invoices ranks up there with sorting laundry, doing taxes, – its manual work that creates headaches with errors and mismatches.

The tool also gives back what is called a “data” PDF, which means it is a file format that can be read by electronic invoice systems.

This is what might be called AP automation, although because there is no fancy stuff like “workflow” and “audit trail”, it might be better just to call it a great invoice processing for small business.

AP automation software packages or SaaS platforms can sometimes be expensive to purchase, and there is usually some resistance to both the cost and the learning curve that comes with them. They come with features that may not be used, and might not be suitable for small business. You can see more about InBox here.

References:
What is electronic invoicing? (from Wikipedia)
Electronic Invoicing can be a very useful tool for the AP department. Electronic invoicing allows vendors to submit invoices over the internet and have those invoices automatically routed and processed. Because invoice arrival and presentation is almost immediate invoices are paid sooner; therefore, the amount of time and money it takes to process these invoices is greatly reduced. These applications are tied to databases which archive transaction information between trading partners. The invoices may be submitted in a number of ways, including EDI, CSV, or XML uploads.

In this 2 minute video, you’ll find out how AP automation works to simplify the processing of all your supplier invoices in accounts payable.

…….

There are 3 components to the AP automation process:

• One is capture: extracting data from either paper invoices or emailed PDFs or other electronic formats.
• Second is workflow: where invoices are gathered into a central dashboard, and automatically sent to managers to review and approve.
• And 3rd is archive & audit: where invoices are archived for searching, reporting, and auditing.

As a business, you are continually receiving supplier invoices either through the mail or by email. If the invoice is in paper format, it is easily scanned and processed by Intelligent OCR.

Intelligent OCR goes through and picks out all of the important fields on each invoice, and then saves that data in the cloud. Emailed invoices in PDF or other electronic format are processed by an Electronic Invoice Engine. It picks out all of the important fields on each invoice, and then saves that data in the cloud.

In Invoice Automation, you view both the data and images of the invoices captured. Invoices are automatically distributed to the proper role for coding and approval based on company policies. There is also a workflow for invoice exceptions. Once invoices are fully approved they are sent to your ERP or accounting system for payment. At all times, you know where each invoice is in the approval process.

Invoice Automation will also securely archive all your supplier invoices, including the audit trail. This archive is fully searchable by over thirty different values including account code, approver, invoice number, and more.

There are 2 types of PDF file formats used for supplier invoices, and they are a data PDF and a scanned PDF.

Data PDF

A data PDF is an invoice that is generated by an ERP or accounting system, or with a utility that creates PDF files for documents. If you can highlight the text in a PDF document, and then successfully paste the text into a spreadsheet or Word document, then the PDF is a data PDF.

In a data PDF you are able to highlight the text, and paste that text into another document.

Scanned PDF

A scanned PDF is an invoice that has been printed and scanned. It is not possible to copy the text.

Because this invoice has been printed and scanned it loses the data layer in the scanning process (as the scanning is only taking a picture of the text information on the page) and you can no longer highlight the text. Instead of highlighting the data, you can highlight a box, as in this example.

In a scanned PDF, you are not able to select text. Dragging your mouse across the page results in a box.

For digital capture, you need a system that will capture both types of documents. Intelligent OCR captures data from both paper and emailed invoices, regardless if the PDF invoice is a data PDF or a scanned PDF. Find our more about Intelligent OCR.