Fully auditable procure-to-pay, with around 75% of invoices three-way matched automatically

The company has multiple departments and business units, and every year it purchases office supplies, production materials, equipment and external services.

In the past, departments raised purchase requests by email or instant messaging, the purchasing team handled quotations, and finance scheduled payments based on invoices.

Although a purchase approval policy existed, it was applied inconsistently in practice, and some requests were only approved retrospectively after the purchase had been made.

Management found it hard to see in good time how much approved spend had not yet been committed, and how much payment would fall due over the coming months.

The challenge

Purchase requests and orders were not managed centrally

Departments submitted requests in different formats, and budget ownership, required dates and specifications were easily left out.

Supplier quotes did not become reusable data

The same items were bought by different people, and historical prices and purchasing terms were scattered across emails and attachments.

Invoice review relied on manual checks

Purchase orders, goods receipts and supplier invoices were each maintained by different roles.

Finance had to confirm quantities, prices and payment terms line by line, which slowed processing.

SHEPHARD's digital solution

Step 1: Establish a purchasing catalogue and approval framework

Purchase request rules were defined by category, amount, department and budget owner.

Responsibilities are clearly separated between requester, budget owner, buyer and approver.

Step 2: Unify supplier data

Supplier master data now holds consistent tax details, payment terms, purchasing currency, lead times and key supplier qualification records.

Supplier quote history and purchasing performance data are retained.

Step 3: Establish the procure-to-pay process

Purchase requests, quotations, purchase orders, goods receipts and supplier invoices are all brought into a Purchase-to-Pay (P2P) process.

Document status controls prevent unauthorised purchases from being executed.

Step 4: Implement three-way matching

Purchase orders, goods receipts and supplier invoices are reconciled through three-way matching.

The system checks quantities, unit prices and the relevant tolerances.

Discrepancies outside the rules automatically create review items, while invoices that meet the rules move on to payment approval.

Step 5: Build spend analytics

Spend is analysed by supplier, department, material category and purchasing project.

Duplicate purchases, unusual price changes and supplier delivery issues are identified.

Implementation approach

We first cleaned up suppliers and purchasing categories, then unified purchase requests and approvals.

Next, purchase orders, goods receipts and invoices were linked digitally.

Finally, three-way matching and spend analytics were deployed.

Business value

Purchasing can control buying behaviour more consistently, finance can spot invoice discrepancies faster, and management has visibility of future spend and payment schedules.

Results (approximate): Automatic three-way match rate approx. 75%; approval cycle approx. −50%; purchase order coverage approx. 95%.

Metrics tracked on an ongoing basis: Purchase request approval cycle, purchase order coverage, automatic three-way match rate, purchase price variance, supplier on-time delivery rate, uncommitted budget balance.

What this case teaches us

The goal of purchasing management is not simply to move approval forms from paper to screen.

True procurement digitalisation manages purchasing needs, commercial commitments, physical delivery and payment together.

*To protect client confidentiality, company details in this case study have been anonymised; screenshots are illustrative and results are rounded approximations.*