Accounts payable invoice matching is the process of matching vendor invoice, purchase order, and product receipt information.
When matching documents (Purchaser order, Product receipt and Invoice), differences among these documents are called matching discrepancies. Matching discrepancies are compared with the tolerances that are specified. If a matching discrepancy exceeds the tolerance percentage or amount, match variance icons are displayed on the Vendor invoice page and on the Invoice history and matching details page.
For example, you enter a purchase order with one line item for 1,000 batteries at a price of 1.00 each. The purchase order is approved and submitted to the vendor. The vendor ships 1,000 batteries, and you enter a product receipt for 1,000 batteries at a price of 1.00 each. The inventory cost for the batteries is updated with this price.
An invoice arrives for 1,000 batteries at a price of 1.10 each. Your legal entity policy allows a 5 percent net unit price tolerance for this category of item. A price of 1.05 would be acceptable, but 1.10 is not. When you enter the invoice information, a price matching discrepancy is identified, and you can save the invoice until the discrepancy is resolved.
You can use the following types of Accounts payable invoice matching:
- Invoice totals matching – Match the total amounts on the invoice to the total amounts on the purchase order. This type of invoice matching includes the least amount of detail, so you can use this option to set up controls that minimize the staff time that is required to review invoice matching information.
- Line and Quantity Matching
This has two options:
Two-way matching – Match the price information on the invoice to the price information on the purchase order.
Three-way matching – Match the price information on the invoice to the price information on the purchase order. Also match the quantity information on the invoice to the quantity information on the product receipts that are selected for the invoice.
- Charges matching – Match the charges information (amounts) on the invoice to the charges information (amounts) on the purchase order.
In this blog, I will taking about Total and Charge matching.
Setup Accounts Payable Parameters:
Scenrio-1: Invoice Total Matching
Scenrio-2: Charges Matching
That’s it for this blog.
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