Article by Noémi Mészáros
What is invoice matching? Invoice matching is the reconciliation of information on the invoice and supporting documentation such as the purchase order (PO) and goods receipt. Having approved the purchase requisition for goods or services, the contracted supplier must deliver the agreed quantity and bill the amount stipulated and applying the correct terms, VAT and discount where applicable. Thus, the invoice matching procedure is to ensure that the vendor’s invoice details correspond to the retailer’s purchase order and the goods actually received. In other words, the ultimate goal is to control the overall workflow prior to booking the vendor invoice as account payable.
For most organizations, it is painfully difficult to manually handle and match invoices, thereby risking unauthorized payments or delays in settling invoices and hampering business relationships with suppliers. Commonly occurring errors in the administration of goods receipts and supplier invoices can be a sign of a broader business issue yielding inaccurate accounting, overpaying and an increased possibility of fraud.
Oracle Retail Invoice Matching (ReIM) provides retailers with an automated solution reducing time and human resources needs while optimizing one of the key activities in the accounts payable department by automating the matching of invoices and requiring human attention to only those invoices that failed to match automatically.
ReIM receives invoice data through Electronic Data Interchange (EDI), or data can otherwise be entered manually in bulk or as a single document. In the latest versions, via the so-called ‘Document Induction’ process, retailers can also load invoices and other documents through spreadsheet-based templates. This way, the same validations may be performed as through the User Interface (UI). Bills for non-merchandise costs generated for import related services such as freight, customs entry or obligations can also be managed through Retail Invoice Matching. You can load non-merchandise invoices from an external system through EDI or create them manually to run these types of expenses through authorization prior to posting them to Financials. In addition, ReIM can list non-merchandise costs on a merchandise invoice if so required by the business.
The automatic matching process verifies whether merchandise invoices can be matched to related receipts within tolerance so that they can be evaluated for best payment terms and posted to a staging table. The staging table interfaces with your accounts payable system. It is recommended that you configure the tolerance level in favor of the supplier allowing a certain level of deviation to increase the number of invoices that are matched automatically, thereby reducing manual reviews. Merely allowing a rounding difference can significantly affect the volume of exceptions that will need manual handling. You can set the amount of variance allowed between an invoice and a receipt at the system level, supplier level, supplier site level, or department level.
