Sachin Sharma, founder of Procare Desk, identifies three invoice matching problems finance teams face: manual effort from poor PO descriptions, weak cash-flow visibility from untracked invoices, and scaling issues that slow close cycles. He recommends standardizing PO details, using a central dashboard, and automating the matching process to catch duplicate payments.
Finance teams in growing Companies spend around 15 hours per week matching invoices to purchase orders and changing receipts and so on. That means a lot of emails, a lot of spreadsheets. So if your team is drowning in emails and spreadsheets, this video is for you. Because in this video I'm going to break down the three areas where invoice matching doesn't scale and how simply to fix it. And, and stick till the end where I'll share one common tip that you can implement to save thousands of dollars in vendor overpayments if you join me for the first time. Welcome. My name is Sachin. I am the founder of Procare Desk, where we help growing companies control spending through purchasing and AP automation. Sign number one is your team is spending way too much time matching invoices with purchase orders. So why that happens? Purchase orders don't have the valid description. Or the vendor is sending you an invoice that is totally different than what was on the purchase order. Or the vendor doesn't put the PO number on the invoice. There could be many reasons for that, but a common problem is the invoice is way too different than what's on the purchase order. Right? So an easy way to fix that is standardize the purchase order to begin with and then asking the vendor to make sure that they are providing the same description on the invoice itself. A lot of times, you know, with the lack of proper structured processes, a PO could simply say professional services, right? But the invoice comes in with the details of what they provide. So now you gotta go look at it and say, is this the same thing? So having a detailed purchase order to begin with helps the matching towards the end of the process. Number two is poor cash flow planning. Your last minute invoices that were never in the system now needs to be paid because it's urgent and it's a critical vendor. You have cash flow issues and you have to go explain to your CFO why your burn rate projections are so different than what you actually said before. So these are all the signs that there is a visibility issue, right? So a simple fix to this would be just having a dashboard, or if you want to use another spreadsheet, you can. But having all the invoices in one place and tracking against purchase orders, like what is against a purchase order, what is invoice, what is yet to be invoiced, and what are all the invoices that are without a purchase order. So at least you have a central register for you to Track what all you need to pay and what is the status of each of those invoices. Right? Implement that to speed up the payment process. Number three is your process doesn't scale with growth. So typically what we see is in all growing companies, a 25% increase in revenue would need would lead to around 30 to 35% improvement or increase in the number of invoices they need to process because they're buying more, hence more number of invoices. And it leads to a couple of things, right? One is since the process is not scaling, you would start seeing in longer time it takes to kind of close books 10 to 15 days post the month end close process starts. I think that is pretty common to see. So this is the kind of a number you want to look at. Or vendor onboarding is very slow, it takes months or weeks to onboard a vendor or your team is skipping some steps like they're not calling the vendor to validate their ach, information fraud is increasing and so on, right? All these are signs that your process is not scaling. So a easy way to kind of fix this would be to number one, automate the process of matching the invoices so your team can spend more time on these strategic activities. Right? So rather than manually matching an invoice with a purchase order and receipt, use a system like Procare Desk or any other system that can match your invoices with these two documents. So your team is actually looking at the exceptions and not every invoice to kind of review it for matching and so on. Right? So those are the three areas you should focus or look for. Now, regarding the bonus tip I mentioned, one of the common problem we see is partial invoicing and overpayment as a result of that. So it's very common to have a purchase order of, let's say you order 10 items, the vendor sends you an invoice for 10, but they only send you eight. And if you're only matching the invoice with the purchase order, you don't know what was actually received. Right? Now the vendor sends you another invoice when they ship the remaining two and guess what? They send you the full invoice and you land up processing it and so on. So a fix for that is making sure you're matching your purchase order with receipt and invoice so that the system can raise an exception and say, hey, this is already invoice, you don't need to pay it again. And doing that you avoid overpayments and later having those awkward conversations. That you overpaid a vendor, right? So just to summarize, you know, to improve your invoice matching process, look for these three signs. Number one is your team is spending way too much time in managing exceptions. Number two is poor cash flow planning. And number three, your system is not scaling with growth. If you like this video, go hit the subscribe button so you get notified when we release videos like that in the future. Thanks for joining me today and I'll see you in the next video.
