{"id":2481,"date":"2015-12-18T21:33:33","date_gmt":"2015-12-18T21:33:33","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=2481"},"modified":"2022-08-03T15:57:15","modified_gmt":"2022-08-03T15:57:15","slug":"strategies-to-increase-your-first-pass-match-rate","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2015\/12\/strategies-to-increase-your-first-pass-match-rate\/","title":{"rendered":"Strategies to Increase Your First Pass Match Rate"},"content":{"rendered":"

Achieving success in Accounts Payable is all about eliminating process exceptions<\/a>.\u00a0 Perfection happens when invoice details match exactly with purchase order and receipt details, without any intervention or rework required.\u00a0 The metric used to measure the rate at which this error-free event happens is called the First Pass Match Rate, and the goal of every Accounts Payable organization is to get this metric as close to 100% as possible.<\/span><\/p>\n

A recent PeercastTM<\/sup> in the Accounts Payable (P2P) research area<\/a> featured a large global company discussing their approach to increasing the First Pass Match Rate for invoice processing.\u00a0\u00a0 By closely analyzing the root causes for mismatches they were able to quickly achieve impressive results, with a steady and sustained improvement their First Pass Match Rate increased from 80% to over 90% within six months.<\/span><\/p>\n

In addition to reducing processing costs, our feature company identified a high First Pass Match Rate as being important for ensuring external reporting accuracy, SOX compliance, timely payments, and maximizing cash discounts.\u00a0 Making progress was hampered by the added complexities of outsourcing relationships, multiple legacy systems, and differences in data standards<\/a>. A root cause analysis identified the following error categories:<\/span><\/p>\n

    \n
  1. Supplier EDI invoicing issues<\/span><\/li>\n
  2. Distribution center issues<\/span><\/li>\n
  3. Legacy system feed issues<\/span><\/li>\n
  4. EDI mapping issues<\/span><\/li>\n
  5. Delays in system updates (pricing, terms, unit of measure, etc.)<\/span><\/li>\n<\/ol>\n

     <\/p>\n

    The approach to fixing these errors was to develop tools to monitor performance, with resources assigned to identify and correct the causes of deviations.\u00a0 For example, to tackle purchase order errors, our feature company created a pricing report that was reviewed daily for pricing and unit of measure discrepancies with master data files, with discrepancies reported to the master data team for correction.\u00a0 To address Receiving Department errors, monthly calls were scheduled between the distribution centers and Account Payable analysts to review the prior month\u2019s performance, and real-time communication processes were created for large-dollar mismatches; all with an emphasis on preventing a recurrence of the same problems.\u00a0<\/span><\/p>\n

    Two iPollingTM<\/sup> questions were created to support the Peercast.\u00a0 The first question looked at First Pass Match Rate performance, with the results indicating that 35% of companies achieve over 90% performance, with 60% of companies at over 80%.\u00a0 Here are the details:<\/span><\/p>\n

    \"what<\/p>\n

    The second iPollingTM<\/sup> question asked about the relative priority of making improvements to the First Pass Match Rate within Accounts Payable.\u00a0 Not surprisingly, 45% of companies see this as a critical issue, with 20% of companies identifying this opportunity as a low priority, either due to being satisfied with their progress in this area or due to more pressing issues.<\/span><\/p>\n

    \"ipolling<\/p>\n

    Below are some of the comments added by Peeriosity members:<\/span><\/p>\n