What is Automated Payables Matching?

Automated Payables Matching

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Automated Payables Matching

Automated payables matching, also known as automated invoice matching or automated accounts payable reconciliation, is a process used by companies to match vendor invoices with purchase orders and receiving reports automatically. This process is facilitated by specialized software or accounting systems, which help increase efficiency, accuracy, and speed in the accounts payable process.

In automated payables matching, the software compares key data points from the vendor invoice, such as invoice number, vendor details, amounts, and dates, with the corresponding data from the purchase order and receiving report. If the data matches, the invoice is considered verified and can be processed for payment. If discrepancies are found, the system will flag the invoice for further review and resolution by an accounts payable staff member.

By automating the payables matching process, companies can reduce the time and effort required for manual matching, minimize errors, and improve cash flow management.

Example of Automated Payables Matching

Let’s consider a fictional company called “TechGadgets” that uses an automated payables matching system.

  1. TechGadgets places an order for 100 keyboards from its supplier, “KeySource.” The purchase order (PO) includes details such as the order number (PO12345), item description, quantity, and price.
  2. Once the keyboards are received, TechGadgets’ warehouse staff creates a receiving report that confirms the receipt of the goods and notes any discrepancies, if any.
  3. KeySource then sends TechGadgets an invoice (Invoice #67890) for the keyboards, including details such as the invoice number, date, PO number, and the billed amount.
  4. TechGadgets uses an automated payables matching system within its accounting software. The system scans the invoice, purchase order, and receiving report for relevant data points, such as invoice number, PO number, quantities, and amounts.
  5. The system matches the data points and confirms that the invoice details align with the PO and receiving report. Since all the data matches, the invoice is considered verified, and the system marks it for payment processing.
  6. If there had been discrepancies, such as a price difference or a mismatch in quantities, the system would have flagged the invoice for further review by the accounts payable staff.

By using automated payables matching, TechGadgets can streamline its accounts payable process, save time, and reduce the risk of errors.

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