Steps in the screenshots correspond to the numbers in the headings.
3-way match is a daily job that runs at midnight to determine which invoices are OK to pay. Three-way match confirms that the the Purchase Order matches the Invoice which matches what was received in the system. This match has to be within a certain tolerance level (see below.) One of the major reasons that 3-way match is so important is because there are a number of different systems at work.
At the time of 3-way match, the system checks for receipts are in the system, PO and invoice. If all are there, the Invoice will post with the date of the receipt. This will prevent the invoice from being in a different posting period from the receipt.
The ZPARKED and ZUNMATCH reports are updated twice a day, once right after 3-way match runs, and once around noon.
EFP3 is our purchasing system of record. It is where the POs are generated and received.
SAP is our Accounting System of record here in the US. It receives PO information (including receipts) through an integration. Invoices are also processed in SAP.
SPS is our Vendor Aggregator for EDI transactions. They process any/all electronic Purchase Order/Shipping/Invoices. No receipt information is housed in SPS.
Things that go into the three way match include the following:
1. Parked Invoices (ZPARKED Report). These invoices can be either manually-entered or electronically-entered (processed through EDI.)
2. Purchase Orders. There can be 1 or more invoices associated with a PO.
3. Receipts for each PO Part line.
4. In three-way match, we are validating that the Line Quantity on the Invoice matches the Receipt and the PO Line.
You can invoice for partial amount on PO line.
There can also be multiple receipts or multiple invoices for a PO line.
The invoice will pay as long as the Receipt Qty > = Invoice Qty.
If there are multiple receipts for the Purchase Order line, the system will ADD all of the Receipts Quantity and Unit Costs together to get the Total Receipt Quantity or Total Receipt Price.
It will also check to see if there are multiple Invoices for the Purchase Order Line. If there are, it will ADD of the Invoice Quantity and Unit costs together to get the Total Invoice Line Quantity, Total Invoice Line Price.
5. Variances: Invoice (Header and Line Level)
If the Invoice is less than $1,000, the system will validate and pass anything under 5% up to $50.
If the Invoice is over $1,000, the system will validate and pass anything up to $50.
Multiple receipts or Multiple invoices per line: When calculating the Variance on the Purchase Order Total and the Invoice Total. The system will take all of the lines from the Invoice with Qty and add calculate the PO Total for the lines invoiced. It does NOT compare it to the total PO amount.
For multiple receipts or multiple invoices, when calculating the Variance on the Purchase Order Line Price, the system uses the Total Receipt Unit Price and compares it to the total Invoice Line Price.
If the values are equal, it is not parked -- It is OK to Pay.
If variance is less than or equal to 5% AND less than or equal to $50, it is not parked -- It is OK to Pay.
If variance is greater than %5 OR greater than $50, it will be parked.
6. Variances: Shipping Costs
When looking at Shipping Costs, you have to compare the Shipping Cost from the Invoice in comparison to the Shipping Cost on the PO.
When looking at the difference between the two, the system will validate that Invoice Shipping > PO Shipping and flag anything that is over 5% up to $50.
7. Variances: Invoice Total (Includes Shipping)
If the Invoice is less than $1,000, the system will validate and pass anything under 5% up to $50.
If the Invoice is over $1,000, the system will validate and pass anything up to $50.
Invoice shipping total will need to be compared to the PO shipping charge. Shipping charges for each Invoice will need to be totaled.
Check to see if there are multiple receipts for the Purchase Order line if so ADD all of the Receipts.
If Invoice Total Shipping charges are less than or equal to PO Shipping Charges, it's OK to pay. The invoice will not be parked.
If Invoices total shipping charges - PO Total Shipping charges are less than or equal to %5 of PO total AND less than or equal to $50 it's OK to pay. The invoice will not be parked.
If Invoices Total Shipping Charges - PO Total Shipping charges are greater than 5% of PO total OR $50, the invoice will be parked. The message will say "Invoice Total Shipping Charges exceed the PO Shipping Charges by more than 5% or $50"
8. Variances: Taxes
Any Invoice with a Tax charge greater than 20% will be flagged for Accounting to review.
9. After 3-Way match runs, the parked invoices will go to Blocked or OK to pay.
- Blocked: Invoice has too many issues to go to OK to Pay without manual intervention.
- You will find these on the ZPARKED report. The indicator is red, and the message says blocked for payment.
- Accounting has two options for blocked invoices: A) Unblock and Pay, or Unblock and reverse invoice.
- OK to Pay: Ready to be paid. Invoices will be paid by payment terms.
- If it is Ready to Pay because you've unblocked it, be sure to check for receipts -- the system will not recheck in this example.
When calculating the Variance on the Purchase Order total and the Invoice total Take all of the lines from the Invoice with Qty and add calculate the PO total for the lines invoiced(not the total PO amount)
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