Procurement Reconciliation

Three-way match purchase orders, goods received notes, and invoices to ensure procurement accuracy.

Procurement Reconciliation is the process of matching three key documents — the Purchase Order (PO), the Goods Received Note (GRN), and the Supplier Invoice — to verify that what you ordered, what you received, and what you were billed for all align. This process catches errors, prevents overpayment, and ensures procurement accuracy.

Three-way matching

Three-way matching compares the following across all three documents:

• PO quantity and price — The quantities and unit prices you agreed to when placing the order.
• GRN received quantity — The actual quantities delivered and recorded at your location.
• Invoice amount — The total billed by the supplier for the delivery.

Eleo performs this comparison automatically when all three documents are linked. Matching entries are marked as reconciled, while discrepancies are flagged for review.

Tolerance rules

Not every discrepancy needs investigation. Tolerance rules let you set acceptable variance percentages so that small, expected differences are automatically accepted. For example:

• A 2% price tolerance means an invoice amount within 2% of the PO price is accepted without flagging.
• A 5% quantity tolerance allows minor delivery variances (e.g. receiving 48 units instead of 50) to pass automatically.

You can configure tolerance rules from the supply chain settings. Variances that exceed the tolerance are flagged for manual review.

Discrepancy flagging

When documents do not match within the configured tolerance, Eleo flags the discrepancy with details about what is mismatched:

• Quantity mismatch — The GRN quantity differs from the PO quantity beyond the tolerance threshold.
• Price mismatch — The invoice unit price differs from the PO agreed price beyond tolerance.
• Total mismatch — The invoice total does not align with the expected total calculated from PO prices and GRN quantities.

Flagged discrepancies appear in a review queue where you can investigate, add notes, and either approve (if the variance is acceptable) or reject (if the supplier needs to issue a correction or credit note).

Variance reports

Over time, reconciliation data builds into a valuable picture of procurement accuracy. Variance reports let you analyse:

• Discrepancy frequency by supplier — Which suppliers have the most mismatches.
• Common discrepancy types — Whether issues are primarily quantity, price, or total related.
• Financial impact — The total monetary value of discrepancies caught through reconciliation.