In the hectic business environment, a single mistake in invoice handling may cost time, money, and resources. That is where 2-way matching comes in: a simple yet effective process that ensures invoices and purchase orders match exactly before any money is paid.
To accounts payable finance teams, learning to match in 2 ways is a game-changer. It prevents duplicate payments, minimises errors, and ensures your procurement and accounting processes run smoothly. However, what does a 2-way match mean, and why is it different from other invoice validation systems?
In this guide, we’ll explain what is 2-way invoice matching is, cover the 2-way matching process, highlight its benefits, and show when to use 2-way matching to ensure smarter, error-free accounts payable.
2-way matching, also known as 2-way invoice matching, is a method used in accounts payable to verify that supplier invoices received match the corresponding purchase orders (POs) and that payment is made. Basically, it verifies two essential documents: the purchase order and the invoice.
In contrast to 3-way matching, which also includes a goods receipt note, 2-way matching concerns only the PO and the invoice. This simplifies it, speeds it up, and is suitable when goods or services are delivered instantly or when a receipt for the goods is not necessary.
2-way matching ensures that a purchase order matches an invoice issued by a supplier before payment is processed. The following is a stepwise breakdown of the procedure of 2-way invoice matching in practice:
The first step in 2-way matching in accounts payable is to compare the invoice against the purchase order. Key elements include:
If everything is correct, the invoice is paid. In the event of a discrepancy, it will be flagged for review. This verification is the core of 2-way invoice matching.
Once the first match is done, the invoice amounts and quantities are verified against the PO. This ensures businesses pay only what has been ordered and agreed to, eliminating overpayments or duplications.
After verifying the invoice and purchase order, the accounts payable department approves payment. Many organizations use ERP or accounting software to automate this step and minimize errors.
Recent accounting packages, such as SAP and other ERP systems, automate 2-way entry matching to minimize manual intervention and errors. Automation can include:
If there is a discrepancy between the invoice and the PO, the system raises an exception. The accounts payable department reviews the matter, contacts the supplier as required, resolves any discrepancies, and then authorizes payment. This will ensure complete control over accounts payable and prevent financial errors.
The 2-way matching process makes it easier to verify invoices, minimize errors, eliminate duplicate payments, and enhance efficiency in accounts payable. The use of 2-way invoice matching will ensure accurate, compliant, and timely payments to your business.
The use of 2-way matching in accounts payable offers several benefits, including greater accuracy, time savings, and improved financial control. Here are the key benefits:
2-way invoice matching makes discrepancies visible before payments are made by comparing invoices to the purchase order. This minimizes human mistakes, helps to avoid overpayments, and maintains financial records.
Duplicate payments are a frequent problem in accounts payable. With 2-way matching, every invoice is checked against a PO only once, saving the business money on duplicate payments.
The 2-way match process, automated through accounting software or ERP systems, speeds up invoice approval, reduces manual workload, and enables finance teams to focus on strategic activities rather than repeating the same verification steps.
2-way matching in accounting provides a transparent and traceable audit trail. Organizations can demonstrate alignment between internal policies and regulations by ensuring invoices are matched to purchase orders before payment.
Verified invoices and automated workflows enable businesses to gain greater control over their spending, and 2-way matching in accounts payable ensures that only approved, accurate invoices are paid, thereby enhancing overall financial governance.
The benefits of 2-way matching go beyond avoiding mistakes and redundant payments; it also enhances efficiency and gives organizations better control over finances. It is a mandatory practice in the management of accounts payable today, whether done manually or through any EPR system.
Understanding when to use a 2-way match helps businesses apply this process effectively, ensuring accuracy without adding unnecessary complexity. The following are the main situations when 2-way matching in accounts payable is the most useful:
2-way matching is best when invoices are directly linked to purchase orders and no goods receipt is required. This usually applies to services, digital products, or other non-physical purchases.
For transactions with straightforward terms, predictable quantities, and consistent pricing, 2-way invoice matching simplifies verification while maintaining accuracy. It does not require an additional step of matching a goods receipt as in 3-way matching
Organizations that make frequent, recurring purchases can benefit from accounting 2-way matching, as it streamlines invoice processing and reduces manual effort. ERP systems can be automated to deal with large volumes.
2-way matching in accounts payable ensures each invoice is matched to a purchase order. This provides a clear audit trail demonstrating adherence to internal policies and external regulations
When payment accuracy is essential, a 2-way match can prevent duplicate payments, overpayments, and errors. It is beneficial when the finance teams have to deal with numerous suppliers or invoices.
2-way matching should be applied to standard low-complexity purchases, recurring purchases, and to situations where audit compliance and payment accuracy are required. By understanding when to use 2-way matching, organizations can optimize their accounts payable processes, reduce errors, and improve efficiency without overcomplicating workflows.
Although 2-way matching streamlines accounts payable, there are specific challenges that organizations can encounter:
Most of these challenges can be overcome by automating 2-way matching in accounts payable using ERP systems, thereby minimizing errors and improving efficiency.
Accounts payable can be optimized for efficiency and accuracy through 2-way matching. Here are some best practices:
These best practices can help ensure that 2-way matching removes errors and duplicates, enhancing overall financial control.
2-way matching is an effective tool for accuracy, efficiency, and compliance in accounts payable. Businesses can check purchase orders against invoices to prevent mistakes, eliminate claims, and improve financial management.
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