What is Matching?

Matching is the process of linking one or more related transactions on an open item account, to 'close' the transactions. This process is also referred to as account allocation. To match, or allocate transactions, you set an allocation marker on the transactions to indicate the matched status.

For example, when an invoice is posted to a debtor/receivables account it is entered as an open, unallocated, transaction on the account. In a simple case, if the invoice is paid in full with a single payment, two steps are required to record the payment fully:

• A payment transaction must be posted to the debtor account to reduce the debtor's balance
• The payment and invoice transactions on the debtor's account must be matched together to indicate that the invoice has been paid.

To match the payment against the invoice you would set the allocation marker to To Be Allocated on the payment and invoice transactions. Then, when the allocations are posted, the allocation marker on each transaction is changed to Allocated.

The transactions posted to open item accounts remain in the system until they are allocated. That is until the transaction contains a matched allocation marker. There are four 'matched' allocation markers: Allocated, Paid, Correction or Reconciled.

On debtor/receivables, creditor/payables, and client accounts it is particularly important that the transactions are matched correctly to prevent paid transactions being treated as unpaid.

If the Authorization facility is enabled, some transactions selected for matching may require authorization before they can be matched.

If instalment checking has been enabled in Ledger Setup (LES), the matching processes ensure that cash is matched against the instalments in either instalment number or instalment date sequence.

Matching can be more involved than simply matching two corresponding items. You may need to:

• match several transactions together on the account. For example, you may need to allocate one payment to many different invoice and credit transactions on the account.
• split a transaction into two to be able to match it correctly. For example, you may have received a payment for only part of an original transaction and need to split the original transaction into two transactions.
• generate additional transactions to record the difference between the 'matched' transactions, for example to record settlement discounts or currency exchange differences.