Automate your PO workflows with two-way and three-way matching from BILL

We’re excited to announce new capabilities to help businesses and accounting firms automate purchase order (PO) workflows. BILL customers who use Sage Intacct and Oracle NetSuite have enjoyed the ability to sync purchase orders and automate two-way matching and three-way matching. Now, QuickBooks Desktop Enterprise, Pro and Premier users can take advantage of similar powerful capabilities.

These capabilities enable BILL customers to gain more control over purchase-to-pay workflows by improving spend visibility and ensuring spending is pre-approved. Learn more about these matching capabilities and how to get started using them.

When should you use two- or three-way matching? 

In accounting, invoice or purchase order matching is the process of comparing documents to ensure the information aligns before the invoice gets approved and paid. If there are any discrepancies, the invoice is held without being paid until rectified.

A two-way match compares two documents–a purchase order and an invoice–and three-way match introduces a third document: the goods receipt.

Determining the type of matching that's right for you will depend on your business and what you’re purchasing.

For example, many service-based businesses use two-way matching to process invoices for services, small amounts of goods, or goods with lower unit costs, especially if they're not recording the receipt of services or items. A two-way match between the PO and invoice may be sufficient in this case.

More complexity is often introduced for other businesses that deal with large amounts of inventory, goods, and/or services. In these cases, in addition to verifying the PO and invoice information, AP teams must also review what was received using an order receipt. 

How can two- and three-way matching benefit you and your team?

Matching is critical to streamlining procure-to-pay workflows and ensuring that payment errors and fraud don’t occur.

Reduce payment errors 

By comparing information across all documents—purchase order, invoice, and item receipt for three-way matching—you can avoid overpayments, duplicate payments, and unapproved payments (that is, paying for items that did not go through your company’s established purchase approval process).

Protect against fraud 

Two- and three-way matching protects your business against intentional and unintentional fraud by ensuring that invoices received have a corresponding PO. This helps signal to AP teams that an invoice isn’t fraudulent and that appropriate internal control policies and procedures have been followed.

Manual matching vs. automated matching

Relying on manual matching is risky because it’s error-prone. The results of a manual match put the onus on you to spot all errors. It can also be a painstaking, time-consuming process. For some, even locating the needed documents can be challenging. Not to mention the extra steps and time it can take to communicate with internal teams on the status of orders and services and/or goods received. 

Automating the invoice matching process reduces time spent on manual invoice oversight, decreases the risk of human error, and makes spend easier to control.

The benefits of BILL two- and three-way matching automation

Automating the matching process offers three specific benefits: more control, greater accuracy, and faster matching.

1. Get more control and visibility into purchase-to-pay workflows

Two- and three-way matching automation with BILL gives you more visibility into your spend against budget––and helps ensure spending is pre-approved––so you can establish greater financial controls.

• Track the progress and status of POs in one place.
• Easily link a PO to multiple invoices—even if they come in at different times.
• Control who can view, link, and match POs when you assign permissions based on role.
• Avoid payment errors by ensuring that price, quantity, and quality of services and inventory received match the agreed-upon terms.
• Maintain separation of duties and reduce potential fraud by quickly matching and sending bills into an automatic approval workflow.
• Mitigate payment issues—BILL will alert you if a mismatch exists so you can avoid mistakes like duplicate payments, overpayments, and unapproved payments.

2. Improve the accuracy of financial records

With BILL automation technology and powerful artificial intelligence (AI), you can expend less effort to make payment decisions more confidently.

• Reduce errors that result from manual data entry by relying on automation and AI that auto-fills line items, quantity, and cost information.
• Create and review bills using precise, up-to-date information. As you pay for inventory and services, BILL will subtract the correct quantities from the PO.
• Maintain accurate records in your accounting software by automatically closing out completed payments on fulfilled POs when billing information is synced from BILL.

3. Speed up your matching process

And, of course, perhaps the biggest benefit of automating two- and three-way matching is how it accelerates the matching process.

• PO (and receipt details for three-way match users) sync directly from the accounting software. If you’re recording the receipt of items, quantities will update automatically in BILL.
• Get a complete view of purchase order, item receipt, and invoice details within a single workspace. No need to toggle between multiple systems or have back and forth with procurement and warehouse teams.

How does purchase order-to-payment-to-reconciliation automation work with BILL? 

The process is straightforward. Here’s how it works in six simple steps.

1. Enable. Once you enable two-way or three-way match, BILL will sync information to support matching between the required documents. 

2. Link. When a vendor submits an invoice, it automatically uploads to BILL. BILL will display all POs associated with the vendor so you can link the correct PO quickly. Key information will populate - like line items and quantities from the PO. Item receipt quantities (for three-way match users) will also populate for goods marked received in QuickBooks Desktop. 

3. Review. Go over items, prices, received quantities (if using three-way match), and enter the quantities you wish to pay for. BILL helps reduce payment errors by alerting you if there are variances. 

4. Approve. Once matching is complete, the bill can be automatically sent through your payment approval workflow. Automated approval workflows are preassigned by the administrator, so the process moves forward as soon as you hit “Save.”

5. Pay. Schedule payments via ACH, BILL International Payment wire transfer, virtual card, and check.

6. Reconcile. Because the PO and bill are linked, a PO will automatically close out in the accounting system once it's paid in full. If partially fulfilled, BILL will display remaining PO quantities during bill creation so you can create and review future bills using precise, up to date information. 

Get time back with automated three-way matching from BILL

Just how helpful is automated matching from BILL? According to Karen McCubbin, Accountant at Polystone Planters, “Purchase order matching from BILL is a big help in confirming all inventory is received and accurately billed for.” Bert Stouffer, Managing Partner and CEO of Polystone Planters adds, “Especially with recent price fluctuations, purchase order matching ensures we pay what we expect.” 

With two-way and three-way matching from BILL, all the information you need to match and pay invoices is at your fingertips. Make invoice payments faster and get some time back when you let BILL do the heavy lifting for you with automated two- and three-way matching.

If you’re already a BILL customer using QuickBooks Desktop Enterprise, QuickBooks Desktop Pro, QuickBooks Desktop Premier, or Oracle NetSuite, PO capabilities, including two- and three-way matching, are included as part of your subscription. If you’re a BILL customer using Sage Intacct, PO capabilities and two-way matching are available as part of your subscription. Learn more, including how to enable these features, here. 

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