Matching
Overview
In Workday, matching describes how documents used in the procurement process match against each other to ensure accuracy of prices negotiated and quantities received. A match exception is a warning indicator that identifies when an invoice and purchase order are in conflict with each other, thus preventing payment to the supplier.
Objectives
By the end of this chapter, you will be able to:
- Identify various ways to use supplier invoice matching.
- Determine which match conditions to use.
- Associate match condition rules with exception reasons.
- Verify a supplier accounts match rule set.
- Create a supplier accounts match override reason.
Supplier Invoice Matching
Workday defines matching comparisons at the document line split, line, or header levels. You can require an exact match between invoices and procurement documents. You can configure matching with a +/- percentage or cost tolerance. If differences fall within a predefined tolerance, many companies pay a supplier invoice without an exact match on price or quantity. A single invoice or invoice line can have multiple match exceptions.
Three-way matching is the most common matching method. It compares the PO (or supplier contract), receipt, and invoice. Three-way matching is the method most companies use to recognize valid financial obligations, as it relies on the receipt of goods.
Sometimes, matching is only between a PO or supplier contract and invoice documents. For example, if there are no goods to receive or if the receipt of goods occurred before the purchase order gets cut (bill only), this is a two-way match.
High-value items might require an inspection before receipt. Matching the PO, receipt, inspection, and invoice is a Four-way match. The inspection setup occurs as an additional step on the
Receipt
business process.Matching in Workday is a real-time process and not run by a specific batch job. Other business processes launch the
Supplier Invoice Match Event
business process. Upon submission of a supplier invoice, the supplier accounts match event will trigger. Then, the invoice will route through matching before it proceeds through the rest of the supplier invoice event.Matching launches as part of the receipt event, change order event, and supplier contract amendment event. Changes to procurement documents will rerun matching against outstanding invoices in match exception. When you process a supplier invoice adjustment, those will route for matching along with the original invoice.
Before receiving or invoicing, purchase orders (POs) must be issued. Any changes to an issued PO will generate a PO change order. The change order is the most current version of the PO with changes or edits. Matching uses the most current version of the PO to compare against the supplier invoice.
A three-way or four-way match requires a receipt. Receiving of goods is performed by receiving a quantity of goods. Receiving of services is achieved by receiving milestone amounts (no quantities). You can opt not to receive service lines for matching by excluding service lines from match condition rules.
When creating contingent labor POs, time is received when the contingent worker records their time for each period by using the
Log Time and Tasks
task. As you log time against the PO, the available amount reduces on the PO by the time logged, multiplied by the contingent worker's rate. Log time and tasks work similarly to project-based services PO without a recorded quantity or unit price. This is important to remember when matching these types of invoices.You can add an action step on the supplier invoice match event or supplier invoice event. In this step, the user creates a receipt for a PO line when there is not one present. Workday recommends this step when the organization is using the self-service receiving.
The supplier invoice is the final matching document. Typically, a supplier invoice with a match exception is held up until the exception clears. In Workday, this kind of supplier invoice remains in In Progress status and waits in match exception for review by someone defined in the
Supplier Invoice
business process.Once you take the required action to clear or override the exception, the matching process runs again. The invoice then completes the additional steps in the process defined for the supplier invoice event.
Matching Configuration
Workday uses the business process condition rule framework process or setup for matching. Setting up matching in Workday relies on the configuration of match condition rules, match exception reasons, match rules, and a match rule set.
Match Condition Rules
: Rules that define tolerances for match processing on supplier invoice headers and lines. Match conditions use the standard logical statements and operators from the Workday condition rules framework.Match Exception Reasons
: These display as text on the invoice header or line and explain why a supplier invoice is in match exception. They are more concise and meaningful to the user than the match condition rule.Match Rules
: Match rules tie the match conditions to the match exception reason. Match rules are display in the Rule Usage tab of the View Supplier Accounts Match Condition Rule
report.Match Rule Sets
: You can create match rule sets for companies and company hierarchies to run the Supplier Invoice Match
business process. You can only tie a company to one match set at once. If the invoice's header company is unassigned to a match rule set, invoices against this company will not process through matching.Workday delivers several matching-specific CRFs for use in match condition rules. To find all the matching CRFs that Workday delivers, search for "Field: MR" (prefix with MR). In addition to finding the list of delivered matching CRFs, you can view the logic behind the CRFs. You can review an evaluation of a match rule CRF on a specific invoice from its Related Actions and selecting Report Fields and Values. Below are some example matching CRFs you will find in a tenant.
Workday Match Rules CRF | Workday CRF Description | Sample Usage of Match Rule |
|---|---|---|
MR Any Supplier Invoice Lines with Spend Category that does not match the PO Line Spend Category | Used optionally in a match rule to detect invoices with lines that do not match their PO line item's spend category. | Used to determine if item substitution occurred (at the spend category level). |
MR Invoice has Lines that exceed Amount or Quantity Received | Used to detect if an invoice has lines that exceed amounts or quantities received. | Used to determine that no receipts exist or that the quantity invoiced is greater than the quantity received. |
MR Max Invoice to PO Line Unit Cost Variance | This field compares the unit cost for each purchase order and invoice line and returns the maximum. Used to set an amount threshold or tolerance for invoice lines where the unit cost does not match the purchase order line unit cost. | Used to determine unit price tolerance as an amount. |
MR Max Invoice to PO Line Unit Cost Percentage Variance | This field compares the unit cost for each purchase order and invoice line and returns the maximum percent variance. Used to set a percent threshold or tolerance for invoice lines where the unit cost does not match the purchase order line unit cost. | Used to determine unit price tolerance as a percentage. |
MR Total Invoice to PO Line Unit Cost Variance | This field compares the unit cost for each purchase order and invoice line. It then sums the differences as a total. Used to set a maximum amount threshold or tolerance for a unit cost variance for the entire invoice. | Used optionally where each line is within tolerance, but the total of the invoice is outside tolerance. E.g., the tolerance on each line is $5 and the total header tolerance is $10. The supplier submits a six-line invoice where each line is outside of tolerance by $3 (no exceptions on any of the lines). However, because the tolerance on all lines is $18, this invoice is in exception. |
MR Total of Non- PO Supplier Invoice Lines | This field sums up the amount threshold or tolerance of all non-referenced invoice lines on the original purchase order. | The supplier is charging for items that were not on the PO. |
MR Total Non-PO Invoice Amount Percentage | This field adds up all invoice lines omitted on the purchase order from the original invoice. It then divides by the total of all lines and multiplies by 100 to calculate a percentage. Used to set a tolerance percentage for invoice lines not included on the purchase order. | The supplier is charging for items that were not on the PO. Value is a percentage. |
Match Overrides
Users can request to override match exceptions using tasks in their My Tasks or by using the invoice's Related Actions. Match exception override requests route through the Supplier Accounts Match Exception Override Event. On this event, you are able to configure approvals specifically for match exception overrides. Typically, approvals route to the Accounts Payable Operations Lead or Financial Manager.
When you override a match exception, the invoice updates to an override match status. The invoice will then continue on to process to an Override match status and will continue on with the rest of the supplier invoice event.
You can configure match override reasons to explain the reason for a match override request. Common reasons for match override are incorrect billing or credit memo expected. Users can also enter a comment when they create their request.
Some organizations have a strong preference of when to override a match exception and when to update source documents to align with the invoice. The override functionality enables you to process and pay invoices more efficiently and requires less data entry from accounts payable and procurement teams.
However, some organizations prefer to update source documents to align the values on invoices, POs, and receipts instead. You might find you prefer this approach for reporting PO history data to a third party or if you use the PO price/quantity to calculate metrics (e.g., cost per surgical case) in other systems. For a clean accounting of the average cost calculation between the put-away and invoice, avoid the following:
- Override no receipt.
- Receipt quantity match exceptions on inventory replenishment purchase orders.