Matching supplier invoices to orders and deliveries
How a manufacturer matches each raw-material invoice to the purchase order and the goods received, holds mismatches and stops duplicates in Achekam.
By Achekam · · 4 min read · For Manufacturing businesses in South Africa, Nigeria, Kenya
Raw materials are where a manufacturer's money leaks quietly. The steel supplier invoices the full order when only part of it arrived. The resin price on the invoice is higher than the price on the order, and nobody agreed the increase. The packaging invoice is paid twice because the copy came by e-mail and the original came with the driver. None of these is dramatic on its own. Over a year, they add up to real margin.
The standard control is the three-way match: before you pay, compare what you ordered, what was delivered and what you were invoiced. If the three agree, pay. If they do not, find out why first. AccountingTools gives a short definition of three-way matching, in which accounts payable compares the supplier invoice, the purchase order and the receiving report before paying. This article explains how that works in Achekam's procurement for a factory in South Africa, Nigeria or Kenya, and the limits to plan around.
Start before the order exists
A match is only as good as the order behind it, and Achekam builds the order on two earlier steps:
- A requisition. Someone on the factory floor or in stores raises a purchase requisition saying what is needed, why and the estimated cost. Someone other than the requester approves or declines it.
- Quotations. Supplier quotations are captured against the requisition and one is selected. Choosing one that is not the cheapest needs a written reason, which is kept.
The purchase order is then raised from the selected quotation of the approved requisition. The person who raised the order cannot approve it, and an approved order can be cancelled with a reason. By the time goods arrive, the price and quantity on the order are ones the business actually agreed.
Deliveries recorded line by line
When a delivery comes in, stores record it against the purchase order line by line, and Achekam keeps a goods-received record. Part deliveries are normal in manufacturing, and they are recorded as such: if the order was for several lines and only some arrived, the record shows exactly which lines and how much.
That record is the second leg of the match, so it has to reflect what was counted at the receiving bay, not what the delivery note claims. A short checklist for the person receiving:
- Count or weigh before signing the driver's delivery note.
- Record only what was actually received, line by line.
- Note damage or wrong items at once, with photographs filed with the delivery.
- Never "receive" goods in advance to help the supplier get paid sooner.
Holding an invoice that does not match
When the supplier's invoice arrives, it is recorded against the order. Achekam matches it with what was ordered and what arrived. If the price or the quantity differ, the invoice is held, and it stays held until someone writes a resolution note.
The note is the useful part. It forces the question "why are these different?" to be answered in writing before money moves. Typical resolutions look like this:
| What differs | Likely cause | A sensible resolution |
|---|---|---|
| Quantity invoiced is more than received | Part delivery invoiced as complete | Ask the supplier for a corrected invoice or credit note |
| Price is higher than on the order | Unagreed increase, or an old order price | Confirm with the buyer; accept with a reason or dispute |
| Quantity received is more than ordered | Over-delivery | Decide whether to keep and pay, or return |
Posting the matched invoice, and the duplicate guard
Once an invoice matches, or its difference has been resolved, it is posted. Achekam puts it in the ledger as expense, input VAT and trade payables. The supplier's invoice number is recorded, and it stops the same invoice being posted twice. The e-mailed copy and the paper original can no longer both reach the creditors' ledger.
Purchases that bypass the order process are still controlled. A supplier bill recorded without a purchase order waits for approval before it posts.
One supplier list, without duplicates
Duplicate suppliers undo every other control: the same company set up twice can be paid twice, and its spend is split across two names. Achekam keeps one supplier list, with duplicate checks by name or VAT number, and quotations, orders and bills all pick their supplier from it.
Limits to plan around
Procurement in Achekam is useful today, but several limits are worth knowing before you rely on it:
- Goods received do not add stock. The goods-received record supports the match, but it does not increase inventory quantities. Stock levels need to be maintained another way.
- Sending the order. A purchase order cannot be sent to the supplier from any screen at the time of writing, although the server can produce its PDF. Agree how orders reach suppliers.
- Nigeria and Kenya. Supplier bills and purchase orders do not yet use a Nigerian or Kenyan business's own VAT rate: they offer 15% or 0% and default to 15%. A supplier's VAT number must be in the South African format, so Nigerian and Kenyan VAT numbers are refused. Purchase orders are recorded in rand, because the order form sends no currency. Nigerian and Kenyan manufacturers should check each of these with their accountant before relying on procurement for VAT figures.
Making it routine
Three-way matching works when it is boring. Requisitions are raised for every material purchase, stores record what really arrived, and the accounts team does not post an invoice that is held. Once materials are under control, the other large cost in a factory is people; labour cost by department from payroll covers that side.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
