{"id":5358,"date":"2022-09-27T16:43:13","date_gmt":"2022-09-27T11:13:13","guid":{"rendered":"https:\/\/stagingwww.zycus.com\/how-to-automate-3-way-invoice-matching-process"},"modified":"2025-02-05T10:12:54","modified_gmt":"2025-02-05T10:12:54","slug":"how-to-automate-3-way-invoice-matching-process","status":"publish","type":"post","link":"https:\/\/dev.zycus.com\/freshz\/blog\/supplier-management\/how-to-automate-3-way-invoice-matching-process","title":{"rendered":"How to Automate Invoice Processes Using 3 Way Invoice Matching Software"},"content":{"rendered":"<p data-pm-slice=\"1 1 []\">Before we get into the automation part, let\u2019s first simply try to understand \u2013 what is a 3 Way Invoice Matching process in ap teams. A <a href=\"https:\/\/dev.zycus.com\/freshz\/solution\/three-way-invoice-matching\">three-way matching solution<\/a>, powered by Invoice Matching Software, ensures payments to suppliers are accurate while protecting the business from unnecessary spending.\u00a0Having an appropriate matching process builds confidence in the firm\u2019s supply procedures and minimizes any adverse impact on cash flow.<\/p>\n<p>According to an <em>ACFE (Association of Certified Fraud Examiners)<\/em> report, rooting out unauthorized or fraudulent invoices can save a company an estimated 5% of its annual revenue.<\/p>\n<h2><strong>3 Way Invoice Matching Process<\/strong><\/h2>\n<p>So how does it work? And how can organizations automate this process? Let\u2019s take a deep dive \u2013 The supplier ships the <a href=\"https:\/\/dev.zycus.com\/freshz\/glossary\/what-is-goods-received-note\/\" rel=\"noopener noreferrer\">goods and once received<\/a>, the receiving department does a quality check and notifies the Accounts Payable staff about the arrival of the shipment. This notification is often accompanied by a goods receipt note, which confirms the acquisition of goods or services.<\/p>\n<p>The invoice contains all the relevant details such as a description of goods, purchase order number, quantity, unit prices, etc. The <a href=\"https:\/\/dev.zycus.com\/freshz\/solution\/vendor-invoice-management-system\">supplier&#8217;s Invoice Matching Software<\/a>\u00a0is then used to verify the <a href=\"https:\/\/dev.zycus.com\/freshz\/glossary\/purchase-description\/\" rel=\"noopener noreferrer\">details against the purchase<\/a> order and goods receipt note.<\/p>\n<p>This comparison of data is called \u2018invoice matching\u2019 and is a vital step in the Accounts Payable process. It involves cross-checking all the documents to ensure consistency and accuracy in the payment process.<\/p>\n<p>The 3-way match principle establishes that data points in all 3 documents must match for a successful 3-way matching. These three documents are the purchase order, goods receipt note, and supplier&#8217;s invoice.<\/p>\n<ul>\n<li>\n<h3><strong>First, We Need to Understand the Procure-to-pay Process<\/strong><\/h3>\n<\/li>\n<\/ul>\n<p>The first step in this process is to place the order with a supplier through a\u00a0purchase order (PO). This document will contain detailed information about the required goods\/services along with their pricing. Once the PO is approved by the required authority it is sent to the supplier and the order is placed.<\/p>\n<p>The supplier ships the goods and once received, the receiving department does a quality check and notifies the Accounts Payable staff about the arrival of the shipment. As soon as AP receives this information, they start working on creating a supplier invoice. The invoice contains all the relevant details such as a description of goods, purchase order number, quantity, unit prices, etc.<\/p>\n<p>Once the invoice is generated, it is then compared to the purchase order. This comparison of data is called \u2018invoice matching&#8217; and is a vital step in the Accounts Payable process. After the invoice is matched with the PO, it is then routed for approval. Once it is approved, the payment is processed<\/p>\n<p>The 3-way match principle establishes that data points in all 3 documents must match for a successful <a href=\"https:\/\/dev.zycus.com\/freshz\/blog\/accounts-payable\/automated-3-way-matching-is-key-to-accounts-payable-success\">3-way Invoice Matching Software<\/a>. If any of it fails to match, then the invoice payment is put on hold until a resolution is achieved.<\/p>\n<ul>\n<li>\n<h3>Let&#8217;s see what the pain points in manual invoice matching and fraudulent invoices are<\/h3>\n<\/li>\n<\/ul>\n<ol>\n<li><strong>Time-consuming\u2013<\/strong>\u00a0The entire process from receiving the PO to making the payment can take up to 30 days. A significant portion of this time is spent on manual matching of invoices with purchase orders and other documents.<\/li>\n<li><strong>High risk of errors\u2013<\/strong>\u00a0With so many documents and data points to invoice match, there is a high chance of human errors. These errors are often a result of the manual matching process, which is prone to mistakes and inconsistencies. This can lead to incorrect payments and cause delays in the process.<\/li>\n<li><strong>Lack of visibility\u2013<\/strong>\u00a0Since the entire process is manual, it is difficult to track the status of invoices and payments. This includes tracking documents like the packing slip, which can be easily misplaced or overlooked in a manual system. This lack of visibility can lead to inefficiencies in the process.<\/li>\n<\/ol>\n<h2>3 Way Invoice Matching with Goods Receipt Note<\/h2>\n<p>3 way matching process can be automated using a <a href=\"https:\/\/dev.zycus.com\/freshz\/solution\/touchless-invoice-processing\" rel=\"noopener noreferrer\">touchless invoice processing<\/a> powered by Artificial Intelligence (AI). This automation empowers the accounts payable team to focus on more strategic tasks rather than manual data entry.<\/p>\n<p><a href=\"https:\/\/zycus.com\/solution\/supplier-management\" rel=\"noopener noreferrer\" target=\"_blank\">Zycus\u2019 supplier management portal<\/a>\u00a0empowers suppliers to create and share digital invoices with the buyers. With the help of <a href=\"https:\/\/dev.zycus.com\/freshz\/\" rel=\"noopener noreferrer\">Zycus<\/a> configurable workflow management software invoices, purchase order, and receiving documents are at a central location. This data is captured into\u00a0<a href=\"https:\/\/zycus.com\/solution\/procure-to-pay\/e-invoicing\/matching-workflow-software\" rel=\"noopener noreferrer\" target=\"_blank\">invoice matching software<\/a> that uses AI to match, manage, receive, and approve, all supplier invoices, irrespective of source or original format. This streamlined approach significantly improves the efficiency of processing vendor payments.<\/p>\n<p>Download our whitepaper: <a href=\"https:\/\/dev.zycus.com\/freshz\/knowledge-hub\/whitepapers\/e-invoicing-maturity-model-for-ap-process-improvement\">E-invoicing Maturity Model for AP Process Improvement<\/a><\/p>\n<h2><strong>Benefits of 3 Way Invoice Matching Automation<\/strong><\/h2>\n<p>This automation of 3 Way Invoice Matching can help organizations in multiple ways \u2013<strong>\u00a0<\/strong><\/p>\n<ul>\n<li><strong>Time savings: <\/strong>Automating the process can help organizations save a lot of time as it eliminates the need for manual data entry and invoice match.<\/li>\n<li><strong>Reduced risks of errors: <\/strong>Automating the process helps reduce the risks of errors as it removes the human element from the equation.<\/li>\n<li><strong>Increased visibility: <\/strong>Automating the process helps increase visibility into the <a href=\"https:\/\/dev.zycus.com\/freshz\/blog\/accounts-payable\/get-started-with-accounts-payable-automation\">accounts payable process<\/a> as it provides real-time insights into the status of invoices and payments.<\/li>\n<li><strong>Improved supplier relationships: <\/strong>Automating the process helps in <a href=\"https:\/\/dev.zycus.com\/freshz\/blog\/supplier-relationship-management\/supplier-relationship-management-a-comprehensive-guide\">improving vendor relationships<\/a> as it leads to timely payments. This, in turn, helps organizations get <a href=\"https:\/\/dev.zycus.com\/freshz\/blog\/e-invoicing\/can-dynamic-discounting-take-accounts-payable-to-the-end-of-the-world\">early payment discounts<\/a> and improve their cash flow.<\/li>\n<li><strong>Streamlining workflows: <\/strong>Approvals for purchasing and invoices are faster, reducing the risk of errors. Vendor invoices, delivery status, and purchase order are auto-tracked in real-time to ensure the elimination of long email chains.<\/li>\n<\/ul>\n<p>Download our research report: <a href=\"https:\/\/dev.zycus.com\/freshz\/knowledge-hub\/research-report\/invoice-workflow-automation-iwa-report\">Invoice Workflow Automation (IWA) Report<\/a><\/p>\n<h2><strong>Conclusion<\/strong><\/h2>\n<p>Having an AI-powered autonomous <a href=\"https:\/\/dev.zycus.com\/freshz\/knowledge-hub\/ebooks\/ap-insights-achieving-a-paperless-accounts-payable-ap-function\">AP function<\/a> can save up to\u00a0$300K\u00a0annually just out of FTE costs. (According to a <a href=\"https:\/\/dev.zycus.com\/freshz\/glossary\/p2p-procure-to-pay-or-purchase-to-pay\/\" rel=\"noopener noreferrer\">Purchase to Pay<\/a> performance study, top performing organizations employ 5.3 FTE per billion vs. 17 FTE for peers).<\/p>\n<p>Zycus&#8217; 3-way <a href=\"https:\/\/dev.zycus.com\/freshz\/solution\/automated-invoice-matching-software\" rel=\"noopener noreferrer\">invoice matching automation<\/a> process helps organizations not only save time and money but also helps in improving the accuracy of data and gives organizations better visibility and control over their\u00a0<a class=\"\" href=\"https:\/\/zycus.com\/blog\/procure-to-pay\/procure-to-pay-process-the-ultimate-transformation-guide\" rel=\"noopener noreferrer\" target=\"_blank\">procure-to-pay process<\/a>.<\/p>\n<p>We invite businesses to\u00a0<a class=\"\" href=\"https:\/\/zycus.com\/request-a-demo\" rel=\"noopener noreferrer\" target=\"_blank\">schedule a free demo<\/a>\u00a0and take a step toward transforming procurement functions to be more strategic and efficient, boosting the business bottom line.<\/p>\n<p><strong>Related Read:<\/strong><\/p>\n<ol>\n<li><a href=\"https:\/\/dev.zycus.com\/freshz\/blog\/accounts-payable\/automated-3-way-matching-is-key-to-accounts-payable-success\">Why Automated 3-Way Matching is Key to Accounts Payable Success<\/a><\/li>\n<li><a href=\"https:\/\/dev.zycus.com\/freshz\/blog\/e-invoicing\/how-to-transition-to-paperless-invoicing-a-step-by-step-guide\">How to Transition to Paperless Invoicing: A Step-by-Step Guide<\/a><\/li>\n<li><a href=\"https:\/\/dev.zycus.com\/freshz\/blog\/procure-to-pay\/automating-the-procurement-process-with-procure-to-pay-technology\">Automating the procurement process with procure to pay technology<\/a><\/li>\n<li><a href=\"https:\/\/dev.zycus.com\/freshz\/knowledge-hub\/research-report\/invoice-workflow-automation-iwa-report\">Research Report &#8211; Invoice Workflow Automation (IWA) Report<\/a><\/li>\n<li><a href=\"https:\/\/dev.zycus.com\/freshz\/knowledge-hub\/whitepapers\/e-invoicing-maturity-model-for-ap-process-improvement\">White Paper &#8211; E-invoicing Maturity Model for AP Process Improvement<\/a><\/li>\n<li><a href=\"https:\/\/dev.zycus.com\/freshz\/blog\/accounts-payable\/5-key-benefits-of-enhancing-your-business-with-an-e-invoice-generation-tool\">5 Key Benefits of e Invoicing Generation Tool: Empower Your Business<\/a><\/li>\n<li><a href=\"https:\/\/dev.zycus.com\/freshz\/solution\/automated-invoice-matching-software\">Solution: Al-powered Automated Invoice Matching Software<\/a><\/li>\n<li><a href=\"https:\/\/dev.zycus.com\/freshz\/solution\/three-way-invoice-matching\">Solution: Three way Invoice Matching Software<\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>Before we get into the automation part, let\u2019s first simply try to understand \u2013 what is a 3 Way Invoice Matching process in ap teams. A three-way matching solution, powered by Invoice Matching Software, ensures payments to suppliers are accurate while protecting the business from unnecessary spending.\u00a0Having an appropriate matching process builds confidence in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":97130,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1939],"tags":[2440,1931,356],"ppma_author":[170],"class_list":["post-5358","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-supplier-management","tag-3-way-invoice-matching","tag-invoice-matching","tag-supplier-management-2"],"acf":[],"authors":[{"term_id":170,"user_id":0,"is_guest":1,"slug":"zycus-inc","display_name":"Zycus","avatar_url":{"url":"https:\/\/dev.zycus.com\/freshz\/wp-content\/uploads\/2025\/02\/zycus-author.png","url2x":"https:\/\/dev.zycus.com\/freshz\/wp-content\/uploads\/2025\/02\/zycus-author.png"},"author_category":"0","last_name":"Agentic Procurement Platform","first_name":"Zycus","job_title":"","user_url":"https:\/\/dev.zycus.com\/freshz","description":"Zycus is an Agentic Procurement Platform that is redefining procurement from Source-to-Pay to Intake-to-Outcomes. Its unified platform combines native Intake, agentic AI, and an end-to-end S2P core to help enterprises drive real procurement outcomes \u2014 not just transactions. Recognized by Gartner, Forrester, IDC, and customers worldwide, Zycus is shaping the next generation of procurement with the Merlin Agentic AI Platform."}],"_links":{"self":[{"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/posts\/5358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/comments?post=5358"}],"version-history":[{"count":0,"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/posts\/5358\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/media\/97130"}],"wp:attachment":[{"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/media?parent=5358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/categories?post=5358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/tags?post=5358"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/dev.zycus.com\/freshz\/wp-json\/wp\/v2\/ppma_author?post=5358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}