Pre-pandemic, payment fraud and misplacement reached a global dollar loss of $12 billion; however, just three months into the 2020 COVID-19 outbreak, that amount shot up by a staggering 75%.
Such high-risk fraud poses a very real nightmare for CFOs and finance professionals. As accounts payable departments work to manage the flood of supplier invoices, this statistic threatens the very livelihood of the hospitality industry, particularly for casino and gaming organizations.
Fortunately, that’s where 3-way invoice matching and 3-way match accounts payable come in. Organizations in the casino and gaming industry are turning to this practice, which reduces risks of fraud, embezzlement, and human error. Plus, it’s a cost-effective alternative to manually fulfilling and managing invoices.
Three-way matching simply ensures that your company is paying solely for the goods and services that were received.
Here’s everything you need to know about transitioning to 3-way invoicing matching and 3-way match accounts payable, and how doing so can benefit your casino or gaming business.
The goal of 3-way matching is to ensure the invoice, purchasing order, and receiving report all contain consistent line item details. This approval process verifies that the products and amount ordered correspond with the products delivered to the receiving department.
Essentially, the 3-way matching method confirms that what your business ordered is what was delivered and paid for.
Manually, this would entail physically cross-referencing the invoices with the POs and delivery receipts; however, 3-way matching allows for automated matching, which quickly and easily identifies fake or duplicated invoices and orders, and compares the correct receipts based on custom standards according to your casino or gaming business.
If there’s one thing that COVID has taught businesses, it’s that we can never be too sure about our payment verification processes. Back in 2020, the mighty Amazon fatefully fulfilled over $19 million in fake invoices to fraudsters. In 2021, Google and Facebook also fell victim to invoice fraud, paying nearly $123 million collectively to a single swindler in Lithuania.
How one managed to pull off a sham of that size and status is disturbing, but it just goes to show that no business—however big or small—is safe.
That’s why companies—particularly those in the casino and gaming industry—are adopting 3-way invoice matching processes in their AP departments.
Three-way matching serves as a form of defense from fraudsters infiltrating your company’s assets. Cross-referencing invoices, POs, and receiving reports ensures that each aspect is legitimate, and your company can maintain confidence in every payment.
Plus, it saves your business money that would otherwise be wasted on phony suppliers. By automating 3-way matching, your AP department can catch any discrepancies before fulfilling payments. Without doing so, your company could risk overpaying or underpaying suppliers, or paying the wrong supplier entirely.
Adopting this method directly influences the stability of your supplier relationships, too. A trusted partnership is formed when a supplier is consistently sending error-free invoices, which allows your company to immediately and accurately fulfill payments.
What’s more, 3-way matching serves as an excellent resource for internal and external audits. Having better, more accurate data on hand will allow your company to prepare its finances for auditors who are looking for any inconsistencies among invoices, POs, or receiving reports.
Many companies choose to manually conduct 3-way matching processing to avoid high costs and catch inconsistencies first-hand. However, in the long run, doing so can be far more costly.
Nearly 75% of organizations don’t have a fully automated purchasing system; by attempting to avoid overpaying, they end up with bigger processing costs.
Plus, the belief that having a manual process to catch illegal activity is only as effective as the individual’s ability to do so; the chances of human error hindering this ability are more likely.
And this information isn’t just based on our opinion—it’s provable data.
According to industry trends and statistics, the average cost of paper invoicing is anywhere from $12 to $40 each. Errors like duplicates or incorrect payments can cost up to $54 to rectify. Paper AP invoicing can result in an additional $4 storage cost, and since nearly 40% of businesses store records for more than a decade, that cost quickly adds up.
Now let’s compare those costs with the savings as a result of automating 3-way matching processes.
Companies with completely automated 3-way match accounts payable processes have seen AP savings of up to 90%. The AR (accounts receivable) costs have in turn been cut in half. The chances of errors have been reduced by 37%. On average, automation decreased invoice processing expenses by nearly 30%. And larger businesses that produced more than 10,000 invoices per month saved approximately $300,000 by automating 3-way invoice matching.
The facts speak for themselves; partially automating your 3-way matching isn’t enough. To see any real operational enhancement, error-reduction, or significant savings, fully automating your 3-way invoice and AP matching is the way to go for your casino or gaming business.
In the casino and gaming industry, every second counts, and time is quite literally money. Situations like fraudulent invoices or incorrect invoice matching can set your business back.
When done correctly, 3-way invoice matching and 3-way match accounts payable methods can serve as an infallible system. Unfortunately, too many companies are doing so manually, which only wastes time and money—perhaps more than they realize.
Choosing to automate these processes can save your company so much time, money, and hassle, there’s no good reason not to; not only is it proven by experts to be the most effective option, but thousands of global organizations in the casino and gaming industry have noticed improved efficiencies, reduced operating expenses, and streamlined business operations.
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For more information about BirchStreet Systems, visit www.birchstreetsystems.com
Gareth is a highly motivated management executive with international sales & marketing experience. He is passionate about helping people achieve success through secure data-driven growth strategies. He has a proven track record of over 30 years as an integral member of high-performing C-level executive teams working with top global and national companies from News Corp to Cargill to achieve performance exceeding expectations. Gareth leads by example with personal encouragement, inspirational leadership, and a healthy sense of humor. He has obtained degrees in Business & Hospitality Management from Queensland University and the Australian College of Journalism. He is also an Advisory Board Member for Customer Experience at the University of South Florida.