By automating the matching of your vendor invoices against a supporting document (purchase order, goods receipt or contract), you can achieve fully touchless invoice processing – which is basically every AP manager’s dream. But as with finding a partner in life, finding a perfect match is hard and a match at first sight is rare. The invoices that don’t automatically match demand tedious and time-consuming manual work in terms of investigating, controlling and reaching out for approvals throughout the organization.
During my 10 years’ working with companies of various sizes, industries and geographies helping them automate and optimize matching of vendor invoices, I’ve gained some really interesting experience in how to crack the nut of invoice matching. Continue reading below for my top 3 lessons learned about invoice matching.
Lesson #1: Invoice matching is not all about the matching engine
True invoice matching, i.e., taking your automation to the next level and setting your goal as fully touchless invoice processing, is not just about the quality of the matching engine, as important as that is. Implementing true matching requires a vision and a structured action plan that set directions for optimization of each area of the AP process.
Here are a few questions to ask yourself:
- Do you have the right information in the right fields and format for data input, such as purchase orders, goods receipts, contracts and invoices, to allow for automated matching?
- Can your automation system support all matching scenarios or are there gaps in the process where manual intervention is required?
- Do you have a smooth and streamlined process for managing exceptions in order to minimize the time spent on manual tasks?
- Is the integration with your ERP system strong enough to allow for accurate and detailed data feeds?
- Do you have access to the reporting you need to monitor key KPIs?
Lesson #2: Invoice matching is not a project with a fixed start and end point
There is no one fix to achieve invoice matching success. Touchless AP processing will not happen overnight but is an ongoing process of continuous improvements. The important thing to remember is to identify the KPIs that are crucial for your business. Measure and monitor these to make sure you are on track to meet your goals.
Remember that changes in your data feed or onboarding new suppliers may cause disruption that will push you a step back. But with accurate reporting in place you can easily identify these kinds of issues, implement tweaks or educate your suppliers to get back on track.
Lesson #3: The benefits of a highly automated matching level are much more than just process efficiency
One of our clients, a large retail chain, told me that the biggest benefit of improving invoice matching quality was that they now really understand the true cost of the products they sell. When you can match invoices at a detailed level, you can allocate the entire cost, including additional costs such as freight and environmental charges, to a product and thereby understand the true cost and bottom line revenue of each product sold.
Obviously time and cost savings realized as part of the efficiency gains are important, but so is the visibility and control you get from improving your invoice matching quality and accuracy. This is why I always recommend to every company I work with to analyze their own business in order to set objectives and KPIs that are crucial to them and their success.
Want to learn more? Download this whitepaper: 5 tactics to achieve true matching of invoices.