Payables Invoice Matching Explained

Oracle Payables shares purchase order information from your purchasing system to enable online matching with invoices. You can match Payables invoices to purchase orders to ensure that you pay only for the goods that you have ordered, or you can match to purchase order receipts to ensure that you pay only for goods that you have received.

PO  matched invoices are invoices that you match to any of the following:

•          Purchase order shipments
•          Purchase order receipts
•          Purchase order receipt lines
•          Purchase order distributions

You can set up controls in your system to require you to have a purchase order match each invoice. Also set an option on a purchase order shipment that controls whether invoices should match to that shipment directly or to a receipt. You set tolerances to specify the range of variance you will allow if the amounts or quantities on the invoice are greater than the amounts or quantities on the purchase order or receipt.

When you enter an invoice and match it, Payables automatically creates distributions and checks that the match is within the tolerance you defined previously.

After you save the match, Payables updates the quantity or amount billed for each matched shipment and its corresponding distribution based on the amount you enter in the Quantity Invoiced field. Payables also updates the amount billed on the purchase order distribution.

You can match an invoice to a purchase order in different ways:

•      Receipt match  Matching to receipts allows you to pay only for goods or services you receive, and to pay for partial shipments without getting invoice holds. In addition, any exchange rate variance is likely to be smaller because the time between the receipt and invoice is less than the time between the purchase order and invoice. If you use one of the Periodic Costing options available in Oracle Cost Management to record costs of goods that you order, it is critical that you always match to receipts to ensure accurate cost accounting.
•          Purchase order shipment match. Based on the Quantity Invoiced, Payables prorates the Match Amount across all nonfully billed purchase order distributions associated with the purchase order shipments you match to. Payables automatically creates invoice distributions based on the purchase order distributions.
•          Purchase order distribution match. You can allocate the match amount to specific purchase order distributions. Payables automatically creates invoice distributions based on the purchase order distributions you match to.

You can match a single invoice to multiple PO  shipments, or you can match multiple invoices to a single PO  shipment. Payables ensures that you match only to PO for the supplier on the invoice and that the

purchase order and invoice currencies match.

Purchase orders are created for Inventory Items or Expense Items. The accounting entries created by matching invoices to PO’s will be different for Inventory Items as compared to Expense Items depending on whether you accrue expense items on receipt or at period end.