There is a common question or misperception of the approach with a singular method towards matching your accounts payable (AP) invoices – more specifically, the lines – to your purchase orders and receipts.
In the AP world, this is always referred to as a 3-way match, which considers matching the lines against three documents: invoice, purchase order, and receipts.
When you purchase the AP solution for Epicor ECM, the software introduces two methods of accomplishing the above: Line-Level Matching and Pull-N-Present.
Let’s start with Line-Level Matching (a 3-way match), which we are all familiar with.
The line-level matching method requires that the Intelligent Data Capture (IDC) licensing is purchased to complete the solution. The first hurdle with line-level matching is pricing or costs.
Line-level matching does require some backend and maintenance work by your Epicor Kinetic team. For line-level matching to work, IDC will effectively capture all your header and footer (summary) details, which include vendor name, invoice number, invoice date, PO number, subtotal, etc.
Then, it will attempt to capture all the line-level data individually, splitting the lines into their respective rows and capturing data such as part number, part description, quantity, unit of measure (UoM), unit cost, etc.
Once IDC has done its part, the invoice and its respective metadata are sent into Epicor ECM to begin processing the invoice and, of course, the matching. Both methods will go through the same initial validation and exception-checking steps.
Does the Vendor exist in the ERP system? Is there a valid PO?
Once these validations are completed, the primary difference between line-level and PNP occurs.
For line-level to appropriately match, the part numbers on the invoice that were captured must match the part number stored in your ERP system, character-for-character. The UoM must be the exact measurement stored in your ERP system.
Lastly, as always, the unit cost that was agreed upon should be the same between the invoice and what is stored in your ERP system.
As you can see, this provides a plethora of variables that must be perfect for the process to be streamlined and touchless.
As the client, you are also forced to maintain and keep your supplier parts up to date regularly for the system to remain automated as much as possible.
Let’s be honest; this can be tedious work that occurs weekly or even daily.
For some clients, this may be okay for many reasons: your suppliers remain the same, and you hardly introduce new vendors; and/or your parts remain consistent from your suppliers, and the same parts are ordered regularly.
Enter the second method: Pull-N-Present.
Epicor developed PNP around 4 years ago to find a better, more efficient way to match invoices to their respective POs and receipts.
This method relieves the client of all the back-end maintenance and removes variables that generally accounted for most automation failures with their AP process.
Let’s start with IDC. We first see that many of the variables of capturing additional information are removed from IDC since we no longer have to worry about the line-item detail. Instead, we focus our efforts on making sure we capture the header/footer detail precisely and accurately…and that’s all!
Once IDC completes its job, just like line-level, the invoice and associated metadata are sent into Epicor ECM for processing.
Once again, the invoice will endure the various validations and exception checks before moving into matching.
This is where the new and improved magic comes into play. Instead of taking each piece of that part and trying to match character for character, Epicor ECM takes the critical data – vendor name and PO number – and sends it to Kinetic.
Kinetic then looks through its database to pull any available lines on the purchase order(s). You are probably wondering what makes lines available.
Epicor ECM will only be presented with lines from a purchase order where the lines are marked received (fully or partially) and are not already invoiced elsewhere.
If the line(s) pass these two checks, Kinetic will present the lines to Epicor ECM to tie them to that invoice and match the extended costs to the subtotal.
At this point, it’s simple math. If the lines presented are received partially, the extended cost will not match the subtotal. If the vendor overcharged us per unit cost, the extended cost will not match the subtotal.
Otherwise, if the lines received are the same quantity as what is invoiced, and the vendor charges us the price that was on the purchase order, we’ve got a match, and the invoice will automatically move on!
Of course, other items or costs could always be associated, but these will be handled the same way regardless of the method. These costs could include things like freight, taxes, or miscellaneous charges. These types of charges generally don’t affect the matching process.
Presently, most Epicor clients have resorted to using the PNP method, and there have been plenty (likely hundreds) of successful implementations.
It’s generally cost-effective and doesn’t require IDC since the AP processor can easily key/index the necessary header/footer data, remove the need to maintain parts and remove many variables.
We don’t know the exact percentage of line-level to PNP, but if we were to guess, it would likely be around 10-15% to 85-90%, respectively. It’s proven that many clients have experienced successful automation by choosing PNP.
At Teccweb, our expertise goes well beyond Epicor implementations and services, but to each unique challenge faced by current Epicor users.
Our knowledge in all things Epicor is a necesssity for companies looking to maximize their Epicor system.
Let Teccweb help you install Epicor ECM and implement the AP PNP automation today!
