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We started from the Point of View that a 3 way match is best practice. That a receipt is an independent validation of the obligation to pay. The key word is independent. As we implemented Ariba, we discovered that it worked for Goods but Services were very rarely tracked independently of the vendor/invoice. Less than ideal but a business practice reality.
Because 10s1 only had a 3 way match (manual or auto receipt) and are commodity driven we stratified the commodities into three categories
- Low value - low risk commodities such as office supplies and computer accessories are auto received.
- Commodities for Goods not auto received are to be manually received.
- Commodities for Services are manually received and the invoice is provided to the receiver to reconcile for the receipt.
With 10s2, we are reviewing changing the business process for category three to a two way match. If the requester is reconciling the invoice as part of the receipt process and has no independent knowledge of the work performed, it is more efficient to have the requester approve the invoice directly. One of the areas that we will be taking a close look at is limiting the requester to approve/reject and no other editing capabilities. The manual receipt has that additional control advantage of preventing any changes to the invoice and by extension backdoor changes to the PO.
Thanks for the response. I have a few clarifying questions.
We also started with 3 way match on everything (better to err on the side of caution).
In the 2 way matching scenario, is the invoice only going to the requestor for approval, or is it duplicating the entire approval chain of the requisition? Since this essentially replaces the control portion previously provided by the receipt (i.e. "Has this good/service been delivered/performed"), presumably the requestor should suffice.
Since in both cases, action is required by the requestor (either receipt or invoice approval), what are the benefits you see for going the 2-way match + Invoice approval vs. 3 way?
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The two-way match has a few advantages starting from the assumption that the receipt can not be done without the invoice in hand.
- This eliminates the additional burden of getting the invoice to the requester. He can review it online and confirm the charges.
- The supporting documentation should be attached to the invoice. therefore the requester has all the needed information in one place
- The IR approval triggers a To-Do which the receipt does not. The PO approval triggers a receipt e-mail but for services that event is disconnected from the IR creating an exception. And for recurring services the one time e-mail is of limited use.
We assume that the authority to spend the funds is approved in the PO and that the approval of invoice is confirmation that the services in the invoice have been performed. Functionally equivalent of the receipt. We go one step farther and have established a policy against 'accepting' PO related IR exceptions. If the invoice exceeds the PO, the PO must be changed.
The weakness to this logic is that not being able to do a reciept without the invoice is not best practice because you have a limited ability to ensure invoice accuracy.