Let's talk about one sneaky metric that reveals a lot about how healthy your accounts payable process is: the PO match rate.
This little number shows the percentage of supplier invoices that actually line up with a purchase order you have on file. Seems simple, but it spotlights how buttoned up your procurement and invoicing systems really are.
Boosting your PO match rate unlocks huge wins:
This quick guide will cover:
Getting your match rate humming uncovers big opportunities to strengthen your systems, free up cash flow, and make suppliers love working with you. Let's do this!
It's pretty simple - you take the number of incoming supplier invoices matched to a PO you already have on file, divided by the total invoices you received that month. Then multiply by 100 to get that match percentage.
For example, say you get 500 supplier invoices in one month. Your stellar team is able to match up 425 of those to an existing PO from your files. Here's the math:
PO Match Rate = (425 matched invoices / 500 total invoices) x 100 = 85%
You'd love to see that match rate as close to 100% as possible. That means all supplier invoices went through the proper upfront ordering process tied to a PO. No surprises!
Getting close to a 100% match rate takes work. But even moving from 50% to 80% matching through workflow improvements generates huge advantages.
Let's walk through those benefits...
Moving just 10-15% more of your total spend through the PO process presents one of the biggest opportunities to strengthen systems and boost savings. Here's how:
Using POs to their full potential smooths out processing, reduces risk, scores discounts, and powers data-fueled decisions.
Calculating and maxing out your PO match rate is the fastest way to start optimizing the procure-to-pay process.
Make it a monthly habit to:
Monitor match rates
Spot process gaps limiting performance
Implement technology and workflow tweaks to bump up rates
Getting above 95% matching should be the goal - it drives huge quantifiable value.
Bottom line, the PO match rate is a game changing metric for assessing and improving how tight your systems really are.
Consistently keeping rates optimal will strengthen your business from both an operating cost and working capital perspective.
Now you've got the scoop on what the PO match rate shows, why it matters, and how to leverage it to take your procurement strategies to the next level! Let's connect on benchmarking your current match rates and finding the right solutions to power improvements.
Integratz helps leading B2B distributors improve supplier pricing and invoicing processes to strengthen visibility, cycle times, accuracy, and their bottom line. We work with your current systems to identify the right processes and reduce wasteful ones, build secure and stable automated workflows, and bridge the gap between new and existing systems. If you have struggled with invoice processing and you’re noticing a hit on your bottom line, reach out to our professionals. Set up a time to talk to our team and learn more!