From Traditional to AI-Driven: 3-Way Matching

Accounts Payable (AP) is tasked with tracking, verifying and clearing the mountain of invoices and paperwork businesses consume to keep cash flowing. The 3-way matching process is a key function that the AP team needs to master to manage invoicing, clear the books, and minimize revenue lost to fraud.

Unfortunately, 3-way matching is a complex and labor-intensive activity that often relies on manual processes. This inevitably leads to inefficiencies and errors that delay payments, increase workloads and put your reputation at risk. However, new AI technology is revolutionizing how companies handle 3-way matching and eliminating many of these common challenges. Here’s everything you need to know to optimize your 3-way matching process with AI-powered systems so you have maximum control over your finances. 

Challenges of traditional 3-Way matching

3-way matching refers to the three documents accounts payable needs to review to verify that a potential transaction is correct and legitimate. 

• Purchase orders include detailed customer information such as addresses, items and quantities, delivery dates and payment terms. 
• Invoices need to match the details on the purchase order, reflect accurate pricing and indicate payment timelines. 
• Receipts are the final link in the transaction history. They should align with all purchase order and invoice information, indicate payment dates and reference outstanding balances. 

One of the biggest obstacles accounts payable departments face is the fact that every customer’s paperwork will be unique. Each business has its own format for documents like purchase orders, and reviewing, reconciling, inputting, and verifying it all has traditionally been a hands-on task. 

As a result, duplications, delays and inaccuracies in the invoice approval workflow can easily go unnoticed because of natural human oversight. This can multiply the challenges AP faces and slowly drain revenue out of the business. On top of that, a manual 3-way matching process can be extremely difficult to scale as businesses grow and transaction volumes increase. Not only does this lead to costly mistakes and resource-intensive activities, but the sheer weight of detail confirmation makes the accounts payable department a prime target for fraud. 

Because of the complexity, some companies rely on 2-way matching – purchase orders and invoices alone – to avoid duplicates and catch fraud. However, this scaled-down process is often a tradeoff of resources and risk.

AI-powered 3-Way matching

The labor-intensive manual activities like those in the procure-to-pay process are one of the primary areas where AI technology can deliver incredible value. These systems are capable of instantly uploading, interpreting, and cross-checking all relevant document details while supporting automation throughout your business. 

ZoneCapture is a leading software integration for NetSuite users that leverages GenAI optical character recognition (OCR) technology to accurately capture and log all the key information for purchase orders, invoices, and receipts. On top of that, it learns from patterns over time and instantly flags discrepancies with a simple red/yellow/green light system to visually alert AP employees about issues. It can even predict potential problems to continually optimize your AP workflow. 

Escalante Golf is a powerful example of the impact AI-based integrations can have on the AP process. They were spending 300 hours a month uploading over 8000 invoices, draining resources and leaving little time for other value-added activities. By leveraging ZoneCapture, they were able to cut their invoice processing time by 70%

The benefits of AI-driven matching for CFOs

CFOs are tasked with making key financial decisions that can make or break a company’s future. They need real-time visibility and insights into financial workflows, and inefficiencies and errors in the procure-to-pay process can lead to inaccurate, out-of-date forecasting that negatively impacts decision-making. 

By leveraging smart integrations like ZoneCapture that automate the 3-way matching process, CFOs have access to of-the-moment data streams that accurately reflect the current state of the books. They can also rest assured that the numbers they’re reviewing are relatively free of errors that can mask fraudulent activities, and they’ll enjoy greater support from finance team members who are freed up to engage in higher-value tasks. 

AI solutions also handle large volumes of data with ease, which empowers the finance department with tools that will reliably scale as the business grows. As a result, finance leaders can focus on extending growth and unlocking new market opportunities rather than fighting to keep up with the paperwork.

Getting ahead of the trend with Zone  

Businesses deploying AI-powered financial solutions will continue to lead their industries, and Zone & Co is providing the most competitive and valuable integrations for NetSuite users in the marketplace. Products like ZoneCapture deploy cutting-edge GenAI technology that streamlines the 3-way matching process and future-proofs companies who are looking to stay competitive in procurement in financial management. 

If you’re relying on manual 3-way matching in accounts payable, you’re probably experiencing challenges across your business including disproportionate resource allocation, costly errors, and exposure to fraud. AI-powered 3-way matching solutions by Zone organize and reconcile all of these documents within your NetSuite instance so your AP department never gets buried under the pile again. 

Join the hundreds of CFOs who are already leveraging Zone’s GenAI to streamline their financial process and drive your business into the future. 

FAQs

What is 3-way matching and 2-way matching?

3-way matching is the process of verifying the information on purchase orders, invoices, and receipts is all consistent and correct. 2-way matching is a less optimal process that only cross-checks purchase orders and invoices. 

What is 3-way matching in accounts payable?

The 3-way matching process in accounts payable involves confirming that purchase orders, invoices, and receipts for each transaction all share identical and accurate information.  Unfortunately, if this is done manually, a business may experience issues like duplicate invoices and higher instances of fraud. 

Which documents are required for 3-way matching?

An accounts payable 3-way match means the purchase order, invoice, and receipt for a unique transaction are all aligned.