You may be missing out on some cash if you’re not using this Accounts Payable policy that’s become popular with businesses.
There’s nothing new about the three-way match, which A/P departments use to prevent overpays, fraud and duplicate payments. It usually works — when you have the required three pieces of documentation. If you don’t, your A/P people can spend a lot of time trying to track down the missing piece(s).
The alternative: No PO, no pay. If an invoice comes in that doesn’t reference an existing purchase order, A/P doesn’t pay. According to a survey by the Aberdeen Group, 49% of best-in-class organizations are using the system.
Of course, you’ll have some transactions that don’t have POs — for instance, for some services. But you can require vendors (who want to get paid) to put PO numbers on invoices to minimize mistakes.