Purchase Order Matching

This article covers how the matching process between an invoice and a purchase order works in SEMINE.

Overview

1. Automatic order matching
2. Manual order matching

Automatic order matching

Introduction

• SEMINE will connect purchase invoices to purchase orders (POs) based on the specified purchase order number during invoice receipt
• When goods are registered as received in the purchase order system, SEMINE will start an automatic matching process - at the latest when a connected invoice is received - between the PO and the Invoice in the following fashion:
• Step 1: SEMINE, if a PO Line number is found on the invoice line, and matches the PO Line form the order, then a full match is applied
• Step 2: SEMINE compares 4 fields on an invoice line against corresponding fields across all purchase order lines: Net amount, VAT, Quantity and Unit Price. If Unit Price and the VAT matches exacly, and the invoice linne Quantity and and Net amount is within available Quantity and Net amount from the PO Line, then the lines are matched. 
• Step 3: Each invoice line receives a quality score based on the count and type of matched fields
• Proposed matches are sorted by the quality score, and the highest score above the chosen automatic matching threshold is automatically chosen

At invoice receipt, all purchase invoices go through this process. A user has also the possibility to select one or more invoice lines, and run this process manually by pressing "Run PO match service," as shown below.

As matching steps 1 and 2 will result in either 0 or 100 % matching quality, but step 3 will have various matching qualities within that range, a threshold for automatic matching is necessary. This threshold value for automatic application of the match between invoice line and purchase order line is set under settings. The line match with the highest matching quality above the threshold value, will be chosen.

Also, see how the matching process works if goods receipt occurs after the purchase invoice is received in SEMINE.

Calculation of Quality Score

Secure Match (step 1 and 2)

EHF	Invoice Lines	Purchase Order Lines	Description	PEPPOL BIS
cac:OrderLineReference / cbc:LineID	purchaseOrderLineNumber	purchaseOrderLineNumber	Step 1: If there are identical references to line numbers on the invoice line and purchase order line, this is considered a secure match.	https://docs.peppol.eu/poacc/billing/3.0/syntax/ubl-invoice/cac-InvoiceLine/cac-OrderLineReference/cbc-LineID/
cbc:InvoicedQuantity + cbc:Item / cbc:Percent + cac:Price / cbc:PriceAmount + cbc:LineExtensionAmount	purchaseOrderLineQuantityMatched +vatRate + purchaseOrderLineUnitPrice + purchaseOrderLineMatchedNetAmount	quantityAvailable + vatPercentage + unitPrice + netAmountAvailable	Step 2: If these four fields (quantity ordered/available, VAT percentage, unit price, and net amount available) match, this is considered a secure match.

Quality score based match (step 3)

SEMINE will provide a quality score based on the fields above, and proposals above the threshold value set under settings will be applied automatically.

When receiving PDF invoices, we search in comparable fields as in the EHF invoice above, but using OCR technology.

When SEMINE compares the fields, the score system will reward some fields more than others. Fields with a larger contribution to the quality score, are Supplier Item Number, Description and the Unit Price. There are other fields that contributes in a lower grade, which is VAT, Net Amount and Quantity. SEMINE will sum up the contribution from each of these fields to a total matching score, which is presented as an overall matching quality % on the line. Each field will only contribute if the content of those are the same on both PO Line and Invoice Line. However the Desciption fields has a fuzzy logic added.

Fuzzy logic text matching

SEMINE uses this algoritm to compare the text in the Description fields. This algoritm includes consideration of misspellings, different word orders, missing words, letters or numbers, and different latin letter based languages. The more similar the texts are, the more it contributes to the overall matching quality score.

if there is no match above threshold, the quality score can be found by clicking on "PO Line Number" field on the invoice line, as shown below.

Recommended matching threshold % is between 40 and 75 %, but you are encouraged to find what is optimal for your clients.

Manual Order Matching

If SEMINE has not been able to match the invoice and purchase order on all invoice lines, there are three options, described below.

Copy to Invoice

The copy to invoice function is best practice if you have received a purchase invoice that relates to multiple different purchase orders, and you want the purchase invoice to be posted with the information on the orders.

The function works by copying the order information on the marked purchase orders down to the purchase lines. Existing invoice lines will not be overwritten.

Before:

After:

After copying orders 200009 and 200010 down to the purchase lines and deleting the existing invoice line, you can see from the image below that both purchase orders are applied to the invoice, and we have zero deviations. 

Copy and Replace Invoice Lines

The copy and replace invoice lines function is best practice if you have received a purchase invoice that relates to only 1 purchase order, and you want the purchase invoice to be posted with the information on the order.

The function works by copying the order information on the marked PO lines down to the purchase lines while overwriting existing invoice lines.

Before:

After:

After clicking "copy and replace invoice lines", the selected invoice line will be replaced and the original invoice line will be deleted. 

Deviations after using this function will only be related to rounding to the nearest cent. Using this function will never result in an associated line deviation between the invoice line and the purchase order, as the purchase order is copied down to the purchase lines.

Manual Application to Purchase Lines

The alternative to the two functions described above is to manually apply the purchase order number, goods receipt number, and PO line number to the purchase lines.

The columns below contain dropdown lists.