Blog|3 min

Announcing automated three-way matching with BILL

Janet Krajco
BILL, Senior Product Marketing Manager

We’re excited to announce the launch of a new capability that will help midsize companies and accounting firms: automated three-way matching. With three-way matching, customers can gain more control over purchase-to-pay workflows as it provides better visibility into spend and helps ensure spending is pre-approved. The new feature is currently available for BILL customers using NetSuite (with plans to support additional accounting systems in the near future). Two-way matching is available for BILL customers using Intacct, NetSuite, and Microsoft Dynamics GP.

What is three-way matching? 

Three-way matching is similar to two-way matching (also known as invoice or purchase order (PO) matching) which is an automated process that checks for discrepancies between purchase orders and their associated invoices, before invoices are approved and paid. With two-way matching, specific figures from both the PO and invoice are compared. If they don’t align, the invoice is held without being paid until the discrepancies can be addressed or rectified.

Three-way matching takes it a step further, comparing the purchase order, the invoice, and the item receipt to ensure all three are in alignment.

Determining the type of matching that's right for you will depend on your business and what you are purchasing. For example, many service-based businesses use two-way matching to process invoices for services or small amounts of goods, especially if they're not recording the receipt of services or items. In this case, a two-way match between the PO and invoice may be sufficient.

For other businesses that deal with large amounts of inventory, goods and/or services, more complexity is often introduced. In addition to verifying information on the PO and invoice, AP teams must also review a third type of document: the order receipt. 

How can three-way matching benefit your business?

Three-way matching is critical to controlling and streamlining procure-to-pay workflows and ensuring that payment errors—and even fraud—don’t occur.

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

Protect against fraud. Three-way matching protects your business against intentional and unintentional fraud by ensuring that invoices received are not fraudulent and that proper internal control policies and procedures have been followed.

Manual matching vs automated three-way match

Relying on manual matching is risky because it’s error prone. The results of a manual match rely on manual data entry where the onus is on you to spot any and all errors. It’s also a time consuming process to manually match.

Automating the process of invoice matching serves to reduce time spent on manual invoice oversight, mitigate the risk of human error, and make it easier to control spend.

The benefits of BILL three-way matching automation

Automating the process of three-way matching offers three specific benefits to product- and/or service-based businesses with large amounts of inventory, goods and/or services: more control/visibility, greater accuracy, faster matching.

1. More control and visibility into purchase-to-pay workflows

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

Control and visibility highlights of BILL’s three-way automation include:

  • Track the progress and status of POs in one place.

  • Easily link a PO to multiple invoices—even if they come in at different points in time.

  • Control who can view, link and match POs when you assign permissions based on role.

  • Avoid payment errors by ensuring that price, quantity, and the 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. Greater accuracy

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

How BILL automation helps with accuracy:

  • Reduce errors that result from manual data entry by relying on automation and AI that autofills 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 NetSuite by automatically closing out completed payments on fulfilled POs when billing information is synced from BILL.

3. Faster matching

And, of course, perhaps the biggest benefit to automating three-way matching is how it speeds up the matching process.

Here’s how BILL 3-way match expedites the matching process:

  • PO and receipt details sync directly from NetSuite so, as items are marked received, quantities will update automatically in BILL.

  • Get a complete view of purchase order, item receipt and invoice details within a single workspace so there’s no need to toggle between multiple systems or go back-and-forth with procurement and warehouse teams.

Get some time back with automated three-way matching

Just how helpful is BILL three-way matching? According to Courtney Smith, Accounting Manager at aboutGOLF, “BILL’s new three-way matching capability has reduced our time spent on AP by up to 75%. We have better control of our finances, and our team can finally do the forecasting and analysis that we didn’t have time to complete before.”

With two- and three-way matching from BILL, all the information you need to match and pay invoices is right at your fingertips.

Make invoice payments faster and get some time back when you let BILL do the heavy lifting for you with automated three-way matching.

If you’re already a BILL customer using NetSuite, three-way matching is included as part of your Enterprise price plan. Learn how to enable it here.

If you’re not yet a BILL customer, request a demo to learn more about BILL’s deep sync with NetSuite including new three-way matching.