Purchase Order (PO) matching is a vital component in supply chain management, ensuring consistency and accuracy between purchase orders, invoices, and receipts. Over the years, PO matching has undergone significant changes, propelled by technological advancements and the need for more efficient procurement processes. In this article, we will delve into the concept of PO matching, its significance, and the solutions available today. We will also discuss the challenges associated with PO matching and why it remains a complex task.
PO Matching is currently undergoing a technological revolution. To understand where we are heading, let's first examine its origins and current state of PO matching.
In the formative years of procurement, Purchase Order (PO) matching was a wholly manual process, reliant on meticulous cross-referencing of purchase orders with invoices by diligent staff. While foundational, this method was inherently slow and prone to human error, leading to mismatches and delayed payments that could ripple through the supply chain.
With the rise of technology, automated PO matching solutions have come to the fore. These solutions use software and algorithms to match POs, invoices, and receipts, significantly reducing manual effort and improving accuracy. Here are some commonly used PO matching solutions today:
Yet, despite improvements in speed, they were not immune to challenges. About 20% of invoices still demanded manual review, and resolving these exceptions consumed significant time and resources, underscoring the limitations of these nascent technologies.
So, what are the factors that make PO Matching so time-consuming for AP teams? Here are the main hurdles:
Now, we stand at the threshold of a new era with AI-powered matching. Our solution enhances OCR capabilities with a layer of AI, crafting a system that not only matches but also understands and learns from each transaction. This AI-empowered approach significantly reduces the need for manual intervention, addressing the 20% exception rate head-on and transforming PO matching into a more autonomous and reliable process.
In the present and looking to the future, our AI-driven method is not a mere incremental improvement but a redefinition of what's possible in PO matching. With Kloo's solution, finance teams can now enjoy unprecedented levels of accuracy and efficiency, freeing them to focus on the strategic elements that drive business forward. This is the reality of AI in action – a seamless, intelligent, and continuously improving system that is reimagining the potential of procurement processes.