Article written by Stephanie Onofri
If all transactions were a quick cash exchange, receivable turnover rates would be relatively high and companies would have no problem making efficient use of their assets. However, since most companies rely on credit transactions, these turnover rates can vary greatly depending on how efficient said companies have been at collecting debts.
Now, anyone who has sat behind a finance desk typing numbers, triple-checking line items for accuracy, using the occasional scratch paper as a coffee coaster (we’ve all done it), and cowering under the looming invisible compliance monster knows how crucial it is to complete these transactions in a timely manner and without error.
This is where three-way matching is making a name for itself in the pioneering world of Accounts Payable Receivable Business Process Automation (BPA).
While a BPA system usually optimizes one department at a time (i.e. either AP or AR), automating scanning, data entry, workflow, and approval processes, three-way matching bridges the gap between these departments, automating the matching process for all data entered on either side. Invoices match with corresponding PO’s, and these match with documentation for payments received such as checks, money orders, and cash or credit transactions.
The benefits of a BPA system that incorporates three-way matching include:
- COMPLIANCE: BPA eliminates the risk of human error during data entry and matching processes. In addition, documents are stored to an ECM which incorporates controls allowing only approved personnel to view and edit specific documentation.
- BETTER AR TURNOVER RATES: Faster transactions allow companies to make more efficient use of their assets, and project more realistic departmental goals.
- TIME SAVINGS: Automation saves departments time by using intelligent capture software that recognizes objects/data on a document and automatically uploads this information into your finance system, and then matching it with other pertinent documentation. In addition, documents uploaded to an Enterprise Content Management system can be viewed by multiple (approved) parties at once, eliminating the paper trail altogether.
- COST SAVINGS: Document scanning and conversion to electronic is performed by BPA specialists in a highly secure conversion facility; this eliminates paper and paper storage costs, allowing AP and AR departments to redistribute budgetary funds in more growth-oriented ways.
Connect with a DataBank business process expert below to find more about how 3-way matching can optimize your document management process!