You can’t pay a steel invoice right if the coil wasn’t received right. That’s the hard truth AP managers know—but procurement teams often forget. In steel distribution, matching POs to receipts isn’t just paperwork; it’s the first and most critical defense against invoice discrepancies, freight disputes, and margin erosion.
When warehouse receiving is sloppy, AP suffers. And when AP gets it wrong, discounts are missed, vendors push back, and finance loses control of spend visibility. That chain reaction begins the moment the coil hits your dock.
Why Coil Receipts Are a Unique Challenge for AP
Steel coils aren’t like boxes of inventory with UPCs and unit counts. They come in varying weights, dimensions, and packaging. Two “identical” coils of hot rolled may differ by several hundred pounds depending on mill tolerances. Each one needs to be weighed, verified, labeled, and recorded on arrival.
Here’s where AP gets tripped up:
Mismatch in weight units: PO says “20 tons,” but receipt logs 19.6—how does AP handle that shortfall?
Freight inclusion confusion: Was this coil price FOB mill or FOB destination? Did the price per ton include freight?
Delayed or partial receipts: The PO was for five coils; only four arrived. The invoice is for five. What now?
Every discrepancy starts in the warehouse—but ends on AP’s ledger.
Best Practices for Matching POs to Coil Receipts
1. Require Digital Receiving with Weight Capture
Paper receiving logs are a liability. AP needs timestamped digital confirmations tied to the PO and linked to weight data. The best systems capture:
Mill tag #
PO number
Received weight (from floor scale)
Receipt date and time
Receiver initials
This eliminates the “he said/she said” when invoice weight doesn’t match what was received. Ideally, warehouse teams use handheld scanners or tablets that sync to your ERP in real time.
2. Use “Weighted” PO Matching, Not Just Quantity
Unlike a simple count-based PO (“100 units received”), steel coils require weight-based matching. A five-coil order might have a planned weight of 98,000 lbs, but the actual received weight could be 96,400 lbs. AP systems must calculate payment based on the actual weight received, not a placeholder unit quantity.
If your ERP can’t support weighted matching, consider extensions or plug-ins that allow “price × received lbs” calculations, not “price × planned units.”
3. Build Tolerance Bands into AP Matching
No mill is perfect. Coils come a few hundred pounds under or over. AP needs a buffer to prevent every small variance from triggering manual intervention. For example:
±2% weight variance is auto-approved
Over 2%, flag for buyer review
If coil weight differs by more than 500 lbs, require warehouse re-verification
These rules let AP scale invoice processing while maintaining accuracy.
4. Close the Loop with Buyers on Receiving Exceptions
AP shouldn’t operate in a silo. When a receipt is incomplete, damaged, or late, AP must loop in procurement immediately. Here’s why:
The vendor may need to reissue a corrected invoice.
Credit memos for short shipments can’t be processed until the buyer confirms resolution.
Payment clocks don’t stop—if AP doesn’t intervene, discount windows close.
One best practice: trigger automatic exception emails to buyers if invoice > receipt by more than 3% in weight or quantity.
Freight Charges Complicate PO Matching—Address It Early
Many steel buyers issue POs excluding freight. But the invoice shows both product and freight. AP is then stuck splitting the invoice, validating the freight portion, and allocating costs—all without a clean reference in the PO.
To fix this:
Break out freight as a separate line item in every PO.
Instruct vendors to match PO format exactly, separating steel charges from freight surcharges.
Use standard GL codes to tag freight separately—so AP can approve the material portion while investigating the freight delta.
If your warehouse logs who booked the carrier and actual delivery times, that data can support or dispute freight charges downstream.
Why This Matters for Margins, Not Just Accuracy
Mismatched coils cost more than a few hours in AP. They lead to:
Overpayments: Paying for five coils when only four arrived.
Delayed payments: Invoices on hold due to unresolved mismatches.
Lost early-pay discounts: When approval is stalled, AP can’t hit the 2/10 Net 30 window.
Audit risk: Poor matching raises flags during year-end or third-party audits.
By investing in warehouse-to-AP integration, businesses protect profit margins and vendor relationships alike.
How Distributors Are Leading the Way
Top-performing steel distributors are equipping their warehouse teams with:
Mobile scanners tied to real-time PO data
Digital coil tagging systems that log receipt weight and mill ID
Receipt reconciliation dashboards that AP can access instantly
Smart rules in their ERP that auto-match by weight and quantity with built-in tolerances
The goal? AP doesn’t have to chase paper, resolve conflicts over email, or delay payments. They just process clean, verified invoices—fast.
Final Thought
Steel isn’t forgiving—and neither is the AP calendar. Matching POs to coil receipts isn’t a back-office detail; it’s a strategic process that determines how fast, how accurately, and how profitably you can pay. That journey starts the minute the truck backs into the dock. AP can’t fix what the warehouse misses—but with the right systems in place, both functions can drive speed and accuracy at scale.
