How 6-Way Match Automation Enhance AP Efficiency?

6-way matching is a robust account payable invoice processing method that validates six critical documents, including Purchase Orders (POs), shipping documents, and supplier invoices, to ensure accuracy and prevent errors. This process enhances payables automation, offering better control and efficiency in AP processing.

Documents Involved in the 6-Way Matching Process:

The 6-way match compares POs, shipping documents, supplier invoices, goods receipt notes, inspection reports, and payment records. By leveraging AP automation software or invoice automation software, businesses can automate payables and streamline the reconciliation process. Advanced accounts payable automation software simplifies document matching, reducing manual effort and improving overall efficiency in accounts payable accounting software workflows.

How the 6-Way Matching Process Works

Step-by-Step Explanation of Matching Each Document:

• Purchase Order (PO): The first document to be matched is the PO, which outlines the agreed-upon purchase details between the buyer and supplier.
• Shipping Documents: These documents confirm that the goods or services have been shipped and received. They should match the details specified in the PO.
• Supplier Invoice: The supplier's invoice, which lists the amount owed, is compared to both the PO and shipping documents to ensure the amounts and items match.
• Goods Receipt Note (GRN): This document verifies the receipt of the goods or services and is compared against the PO and shipping documents to confirm the correct delivery.
• Inspection Report: This report ensures the delivered goods meet quality standards and are in the expected condition. It is compared with the shipping documents and GRN.
• Payment Record: Finally, the payment records are matched with the supplier invoice, ensuring that payment terms are met and accurately reflected.

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Challenges of the Manual 6-Way Matching Process

• Compliance Gaps: 2-way and 3-way matching fails to address compliance requirements. Modern AP automation systems and government databases allow for more comprehensive checks on vendor invoices, but traditional matching systems do not integrate these checks, leaving gaps in the payable process.
• Outdated Technology: Legacy accounts payable software and payables automation systems rely on outdated matching methods, which create room for compliance lapses and errors in AP processing. These systems are not equipped to handle modern invoice automation needs, making them inefficient in today's business environment.
• Limited Fields Checked: Traditional accounts payable invoice processing only checks basic fields like invoice, PO, and GRN numbers, overlooking other critical information. This limitation increases the chances of errors and inconsistencies, affecting the overall accuracy of the payable process.
• Lack of Compliance Checks: 2-way and 3-way matching systems do not check for crucial compliance elements such as PAN, GST, and e-invoicing requirements. Without these checks, accounts payable automation cannot fully ensure compliance with tax regulations, leading to potential legal and financial risks.

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Role of ERP Systems and Automation in Streamlining the Process:

• Integration of Document Comparisons: ERP systems and automation integrate and automate the comparison of documents, such as purchase orders, invoices, and shipping receipts, eliminating manual checks and reducing errors.
• Automation with AP Software: Accounts payable software and AP automation software automatically match documents, speeding up the process and reducing manual effort.
• Faster Invoice Processing: Invoice processing automation and automated AP software ensure timely and accurate payments, improving efficiency and reducing delays in the payable process.
• Improved Payables Automation: Leveraging advanced accounts payable automation software allows companies to manage the entire payable process efficiently, improving cash flow and operational control.

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CashFlo: Optimizing 6-Way Invoice Matching

• Comprehensive 6-Way Matching: 6-way matching ensures that invoices are validated not just with the PO and GRN, but also through integration with government databases like GST and e-invoicing for full compliance. This comprehensive validation streamlines the payable process and enhances accounts payable automation.
• Hold or Park Invoices: With AP automation software, invoices with discrepancies can be placed on hold while vendors are notified for corrections, ensuring proper validation before final booking. This reduces errors and enhances the accounts payable invoice processing workflow.
• 10-Point Invoice Matching: The 10-point matching process checks critical details such as vendor information, line item rates, and GST compliance, improving the accuracy of invoice reconciliation. By leveraging invoice automation software, businesses can accelerate and simplify accounts payable invoice processing.
• ERP & WMS Sync: Seamless integration with ERP systems like SAP and Oracle allows automatic synchronization of invoice data, reducing manual entry and errors. This integration boosts the efficiency of payables automation and ensures smooth operations across all accounts payable software platforms.

Conclusion 

Automating the 6-way matching process enhances AP efficiency by using accounts payable automation and invoice automation software to validate documents like purchase orders and supplier invoices. This reduces manual effort, minimizes errors, and improves financial control, compliance, and fraud prevention.

With payables automation, businesses can manage cash flow better, ensure timely payments, and strengthen supplier relationships. Automating the AP process eliminates manual matching errors, streamlining workflows and allowing companies to focus on strategic tasks for greater profitability and efficiency.

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