Processing invoices remains one of the most resource-intensive procedures in the order-to-cash cycle. From validating invoice details against purchase orders and goods receipts to approving invoices for payment, organizations invest significant time and effort into matching invoices manually.Â
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However, manual invoice matching brings complexity. Employees must compare endless streams of data across various documents and systems to guarantee accuracy before releasing payments. This complexity exposes organizations to compliance risks and strains vendor relationships. Â
Fortunately, intelligent document processing solutions like Kudra are revolutionizing invoice matching. With flexible workflows, powerful AI, and integration capabilities, Kudra automates the intricacies of invoice matching to boost efficiency, lower costs, and promote growth.
Understanding Invoice Matching: The Nuts and Bolts
Invoice matching, also termed 3-way matching, is the practice of comparing purchase order (PO) details, goods received quantities, and supplier invoices to validate payment amounts before check runs. It prevents erroneous or fraudulent payments through identifying discrepancies.
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Organizations employ 2-way, 3-way, or 4-way invoice matching based on their procurement environment. 2-way matching compares POs to invoices, 3-way adds goods receipts, while 4-way further matches service entry sheets. Contract matching is also used for non-PO invoices.
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Invoice matching confirms if:
– Invoice items match PO descriptions
– Quantities match goods receipts
– Prices match PO rates
– Tax calculations are accurate
– Payment terms align to contracts
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By verifying these points, organizations mitigate compliance risks from issues like duplicate payments or overpayments. The process also provides the substantiation needed for audits.Â
However, manual validation of endless streams of data is immensely complex. Employees struggle to compare intricate details across various documents and systems.
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This complexity strains productivity and leaves room for errors to creep in.
The Need to Automate Invoice Matching
With rising transaction volumes and globalization expanding supply chains, organizations cannot rely solely on manual procedures anymore. Invoice matching needs automation to drive efficiency.
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Automating the validation process brings tremendous advantages, including:
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1. Drastically Improved Productivity
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Automation handles time-consuming data comparisons across systems rapidly. This allows the workforce to focus on value-added exceptions and reconciliation rather than repetitive matching tasks. The associated productivity gains are massive.
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2. Reduced Processing CostsÂ
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By leveraging automation to simplify validation, organizations trim considerable costs in managing the invoice matching process. Automation also lowers the risk of costly errors escaping checks.
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3. Better Vendor Relationships
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With accelerated invoice processing, suppliers get paid faster. This makes them likelier to offer better prices and commercial terms. Automation also minimizes disputes stemming from processing delays or errors.
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4. Enhanced Compliance & Audit Readiness
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Automated matching, along with the associated audit trails, provides substantiation needed to establish financial controls. Organizations can readily showcase compliance to procurement guidelines and accounting standards during audits as well.
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The necessity for automation also gave rise to supportive technologies like AI and OCR to extract, compare and reconcile high volumes of data precisely. However, the full potential of these tools can only be realized by implementing an intelligent automation solution purpose-built for the intricacies of invoice matching.Â
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This is where Kudra’s document processing platform comes into the picture.
Kudra: Intelligent Invoice Matching Simplified
Kudra allows organizations to incorporate invoice matching workflows rapidly utilizing pre-built AI templates for popular use cases. Its easy-to-use visual interface empowers subject matter experts to train AI models for specific matching needs.Â
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Kudra expedites data extraction from complex documents like POs, goods receipts, invoices, contracts, and supporting manuals. The data can then be exported to desired systems for reconciliation. These capabilities facilitate the end-to-end automation of validation procedures.
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Here are some standout features that make Kudra invaluable for invoice matching:
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1. Flexible Workflows:Â
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Kudra equips organizations with an intuitive drag-and-drop workflow builder. Users can rapidly model workflows catered to their unique matching requirements without coding. Pre-built templates further simplify workflow creation.
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2. Precise Data Extraction:
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Kudra utilizes advanced OCR and AI to extract granular data from tables, schematics, handwritten notes, and other intricate documents with high accuracy. This allows comprehensive invoice matching encompassing the minutest details.
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3. Powerful ChatGPT Integration:Â
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Users can leverage OpenAI’s revolutionary ChatGPT module to add reasoning and context to workflows. For instance, ChatGPT can review contract clauses, spot calculation errors in invoices, or even summarize disparities across documents.
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4. Rapid Custom Model Building:Â
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Subject matter experts can train custom AI models with specific instructions and just 20 labeled examples. This allows Kudra to handle unique or complex validation needs better than pre-built models.
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5. Seamless System Integrations:
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Kudra readily integrates with downstream platforms like ERPs, RPA tools, and cloud storage solutions. This enables the extracted invoice data to automatically flow across systems for reconciliation.Â
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These well-rounded capabilities make Kudra an ideal invoice matching automation platform. Its versatility allows organizations across industries to easily build tailored matching workflows, ensure high accuracy, and smoothly integrate with existing environments.
Driving Efficiency for a Logistics Enterprise with Kudra
To demonstrate Kudra’s efficacy in automating invoice matching, let’s walk through a use case in the logistics industry.
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A logistic company handles thousands of shipments daily across a global delivery network. However, validating freight invoices was entirely manual. Employees wasted hours scrutinizing endless documents, causing backlogs. Many discrepancies still slipped through the gaps, resulting in erroneous payments.
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By adopting Kudra, The logistic company automated 90% of its validation process within months.
Kudra’s pre-built templates rapidly extracted data from key documents like bills of lading, customs forms, transport contracts, freight invoices, and proof of deliveries. Powerful OCR precisely parsed handwritten delivery notes and vehicle logs.
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ChatGPT reviewed clauses in complex transport contracts to validate invoice amounts and flag discrepancies for investigation. Custom AI models were also trained for niche needs like extracting fuel surcharge calculations.
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The extracted data seamlessly flowed into the TMS, reconciling invoice line items against contract rates and proof of delivery records. Exceptions were routed to staff. This freed up resources while tightening controls and accelerating turnaround times.Â
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By leveraging Kudra’s versatility, the logistic company reduced invoice processing costs by 30% annually while improving supplier relations with quicker payments. Audit compliance also enhanced.
Conclusion
Invoice matching plays a pivotal role in safeguarding organizations against erroneous payments while providing the foundation for sound financial controls. However, persisting with entirely manual validation procedures is tremendously inefficient.
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The complexity of comparing high volumes of granular data across multiple systems calls for intelligent automation. Purpose-built solutions like Kudra facilitate this through advanced data extraction, built-in AI, flexible workflows, and interoperability with surrounding systems.
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By combining domain expertise with cutting-edge technology, Kudra delivers rapid, scalable, and highly accurate invoice matching critical for modern business environments. Its ease of use empowers teams to stay focused on delivering value.
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As organizations aim to optimize productivity, compliance, and controls through digitization, automating the invoice validation process is no longer optional. It is an urgent imperative. With Kudra’s feature-rich platform, enterprises can hit the ground running on their automation journey today and realize the many rewards awaiting.
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So why wait? Discover first-hand how intelligent document processing can overhaul your invoice matching. Request a demo of Kudra now!
