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Current state of the three way match process
Businesses are rapidly adopting AI and OCR for data capture and integrating it with ERP or accounting software and robotic process automation (RPA) software. OCR helps them conduct three way matching (and other routine processing tasks). We cite examples of businesses adopting advanced OCR systems to gain significant efficiencies and competitive advantage.
Use of AI and OCR in three way matching of invoices
Using best practices, businesses now use optical character recognition (OCR) scanning, artificial intelligence (AI), and deep learning technologies for digitization and three-way matching. OCR can be integrated with robotic process automation (RPA) software.
Nanonets provides a leading-edge automated platform for accurately capturing and electronically processing the purchase order, receipt, and invoice documents needed for three way matching of invoices.
Businesses can capture unstructured data in requested fields and add new fields. Machine learning lets the system become more accurate as it gains experience from prior document data capture and retrains. Besides using OCR capture for the three way match process, the best systems enable uploading electronic invoices received via email or other online delivery methods.
Robust OCR and AI/ML systems for data capture, like Nanonets, include integrations with other software. The integration includes using Zapier to import data from your email, inbox, Dropbox, Box, or another source.
Integrating with your enterprise resource planning (ERP) software and warehouse management system (WMS) facilitates three-way document matching. OCR systems, like Nanonets, also integrate with customer relationship management (CRM) systems like Salesforce.
For invoice automation, AI-powered OCR software captures vendor invoice data and feeds it into the accounts payable module of an ERP system. Invoice automation matches supplier invoices to purchase orders and receipts for three way matching.
Users can opt to seamlessly integrate with robotic process automation (RPA) platforms like UiPath to automate three-way matching using bots. Nanonets combines with your choice of several RPA platforms.
Besides integrating with other software, users can query the OCR model after training it or using a pre-trained Nanonets model.
To relieve the pain point of fraudulent invoices, if users specify indicators of a fraudulent document, Nanonets OCR can detect and flag fraudulent invoices to prevent the payment of these invoices.
Tech advances in OCR include using computer vision, working with unstructured documents, and applying deep learning algorithms and natural language processing (NLP).
According to a 2020 report co-authored by Deloitte Digital (U.K) and UiPath that quotes a 2019 Everest survey:
“Many organisations are devoting more financial and human resources to deploy intelligent document processing capabilities. Success by forward-looking organisations is driving confidence in a market expected to grow 70-80% over the next two years to US$1.1 billion.”
Business thought leaders using tech advances for three-way matching
The major global accounting firms are huge supporters of invoice automation using OCR with artificial intelligence and machine learning, plus robotic process automation. As an example, Deloitte is a Nanonets customer that regularly reports on the advantages of an automated invoice matching system that streamlines accounts payable workflows, reducing required labor time and costs.
Cummins, P&G, and Sherman Williams are Fortune 500 industrial companies using Nanonets to accomplish OCR-related tasks. DoorDash also uses Nanonets. And large insurance claims processing companies use Nanonets.
Insurance claims processors benefit significantly from using Nanonets OCR solutions to digitize data from invoices and receipts, as described in this case study.
Besides these large companies, small to medium-sized enterprises (SMEs) gain efficiency from implementing Nanonets OCR solutions for accounts payable.
In a case study, a multi-state, multi-location, SME jewelry retailer benefits from using Nanonets to enhance its capabilities beyond those provided by QuickBooks alone. In a Nanonets testimonial, Happy Jewelers states: “Our employees now feel more productive and happy as most of the clerical work is now out of their lives.”
The automation process
The OCR/AI automation process can efficiently handle a diverse range of business objectives, including verifying loan documents for financial institutions, identifying inappropriate social media postings using computer image processing, and invoice processing, including three way matching. In this blog article, we focus on the three way matching use case.
The automation process begins with advanced optical character recognition (OCR) software, like Nanonets, that uses artificial intelligence, machine learning, and computer vision technologies to improve accuracy and enhance its capabilities.
How it works…
Nanonets accepts online invoices, purchase orders, and receivers from several of your online sources. Nanonets also provides significant value by capturing data from paper documents, including hard-to-read handwritten ones, with a high accuracy rate. Not all AI-driven OCR systems offer precise handwritten document functionality like Nanonets.
Upon capturing documents data and mapping it to fields, Nanonets can perform post-processing applying its AI and machine learning capabilities. During and after data capture, changes can be made in Nanonets. For example, field data formats can be standardized for documents received from various vendors.
Users can train and retrain the model with a Nanonets machine learning algorithm using a sample of data with labels or select a pre-trained Nanonets model. Retraining and repeated use of a model improve accuracy in OCR detection (and other uses like image classification and object detection).
As a reference point, Nanonets support believes that it usually takes two to eight hours to train a model. If it takes longer to train your model, consider upgrading your Nanonets software plan.
Nanonets describes how its users are building custom deep learning based OCR models in a detailed guide.
Nanonets provides the API interface and code. Nanonets exports data in the computer language you prefer to your choice of apps.
Nanonets can integrate directly with software like a company-wide ERP system or QuickBooks (or a competitor’s) accounting software and a warehouse management system through an API connection.
Nanonets has an optional API integration with robotic process automation (RPA) software bots to conduct RPA-based automated invoice processing and three way matching with supporting documents.
Nanonets security includes a Software Development Lifecycle Policy for its users, employees, and third-party contractors. The Nanonets software policy addresses encryption, standards, and worldwide GDPR compliance for the privacy of EU-based residents using the software.
Pricing options
Nanonets offers monthly, per model SaaS pricing plans (plus usage costs) at different levels for each type of software Model, including Starter, Pro, and Enterprise. The free Starter plan has limited features and is offered as a try-out platform. Nanonets models offered include Custom Model, Receipts, Invoices, Driving License, and Passports.
The Enterprise plan offers more features, including a dedicated Account Manager, personalized 1-1 team training, and a higher security and control level. Request a custom quote from Nanonets sales for Enterprise.
Control & support
Nanonets software users can access Usage Stats for their number of documents processed, number of fields processed, and cost incurred during a billing cycle. This access allows users to access status information and control usage costs.
For customer support, Nanonets provides a searchable knowledge base in its online Help Center that includes a Getting Started Guide and documentation by topic for self-training.
Nanonets also provides short video tutorials, including How to build an OCR model with Nanonets.
Looking to automate the 3-Way Matching process in your organization? Try Nanonets™ and get the benefits of automating Three-Way Matching through an AI-based OCR technology.
Benefits of automating the process
Benefits of automating the three way matching process include:
- Audit readiness
- Error reduction in accounting
- Fraud reduction
- Seamless sync
- Man hour savings
Companies and their auditors are moving from inefficient and ineffective manual processes to accounting and auditing software with digitized processes using OCR, AI, automated bots, and data visualization tools with business intelligence for analyzing results and patterns.
By using accurate, automated three way matching of invoices, purchase orders, and receivers, the chance for errors and fraud is reduced when users provide specific instructions for fraud detection.
Audit software can seamlessly sync with an ERP system already integrated with AI-driven, OCR data capture.
Accounting internal controls and financial statement reliability reduces the scope of additional audit procedures needed. Efficient and reasonably current processing, approval, and payment of vendor invoices make the financial statements more reliable.
Time savings are substantial, leaving more employee time for fulfilling audit requests. Modern, digitized audit software using AI technology can reduce the need to request some of the information from clients. Accounting and accounts payable can complete any audit request on a timely or early basis, so the auditors don’t experience delays due to waiting time, increasing audit fees.
And time savings result in reduced labor and hiring needs, reducing business costs.
Reliable OCR with AI data capture software and invoice automation handles three way matching of invoices to purchase orders and receipts. This automation process can help a company keep up with the accounts payable and payments workload, increase accuracy, reduce erroneous or fraudulent payments, close the books earlier, and cut related department labor and other administrative costs.
Conclusion
This article provides an in-depth guide to three way matching of invoices. Automation improves the three way matching process in finance by increasing efficiency and reducing risk of errors from manual data entry. Nanonets provides a state-of-the art, AI-driven OCR software solution for implementing the three way matching process.
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