Purchase Order Matching: The Challenges and AI Solutions
When a company receives goods or services, its financial system needs to compare them to the purchase order (P.O) that was granted to pay for them. This process is known as invoice matching or purchase order matching. Before starting the acknowledgment and payment processes, this procedure is used to make sure that the products or services obtained are exactly what was purchased, that they were obtained in the right quantity, and that they were purchased for the specific contract rate. P.O. matching aids in preventing fraud or mistakes in the purchasing process and in ensuring the validity and accuracy of a firm’s financial statements.
The Challenges of Purchase Order Matching:
In the universe of invoice processing, discrepancies are prevalent, and if you work in the accounting unit, you can completely relate to this. For anyone who needs to understand what such a discrepancy or deviation is, it is an inconsistency between an invoice, goods receipt, or purchase order. Below are some of the most common challenges of invoice or purchase order matching:
Lack of Information
Missing data from one of the income statements is one form of deviation. Quite often the PO number completely disappears from the receipt of the goods! The Accounts Payable (AP) team can make sure that the missing data is not overlooked by double-checking all income reports. Certainly, this can become a cumbersome task given the volume of invoices that are generated daily.
Incorrect Quantity or Price
An imbalance in quantity or price is one of the most typical forms of deviation. A quantity deviation would occur.
Unreliable Invoices
Since not all invoices are being sent in good resolution, it can be challenging to read them or compare the information to other records. For AP automation that depends on layouts and rules, manually written information on invoices or missing information, such as invoice numbers, can be challenging. This may result in avoidable delay, subject to specific handling, necessitating the AP team to locate the required parties to obtain clarification on the info on the invoice.
Automated processing
Manual tasks can be time-consuming and susceptible to errors. Receipts and other paperwork frequently get lost in the mix when your financial department has to sort through dozens and dozens of invoices per day. Additionally, manual tasks can result in more accounting errors, such as incorrect financial reporting and keyed-in deadlines.
Solutions to Address the Above Challenges
One can match invoices to purchasing orders regardless of where specific data is by using Artificial Intelligence invoice processing. Introducing an invoice automation system into your regular business operations has the following advantages:
- Little Manual processing: This implies that you can work more efficiently and process more invoices with less effort!
- Exact Line-Item Detection: When processing invoices automatically, AI can accurately identify each line item and check that all financial records are in proper congruence before planning for payments.
- Simpler Invoice Approval: Everyone dislikes a choke point, and an AI system allows users to receive simpler invoice approvals with just a few mouse clicks. Little or no internal conflict and more timely and accurate payment of invoices become simple by-products in this way!
Conclusion:
It may be enticing to stick with the existing system, but utilizing a thorough invoice analysis tool with PO matching functionality, can be considered to permanently eliminate the problem of the mismatched relevant paperwork.
VLC with Microsoft Dynamics 365 Business Central and Azure AI can help you organize invoice processing adequately. Which can help you to avoid incorrect and bulky invoice processing. Utilize AI to remove mechanical speculation from your Purchasing, Receiving, and Accounting office and take concrete steps to streamline your authorization process flow. Talk to one of our professionals today!
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