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What is the Three Way Match and Why Should You Care

What is the Three Way Match and Why Should You Care

When you’re in the purchasing department, you normally want to make sure what you’re paying for, the goods/services you’re receiving, and the supplier invoice amount are all aligned.

  • Otherwise you might leave your organization open to some unintended risks:
  • You pay for things you didn’t order (non authorized purchases or fraudulent invoices)
  • You pay for things you haven’t received yet (early payment)
  • You’re late on payments for things you have received (accruing late penalties)
  • You might double pay for the same goods and services (duplicate orders)
  • You pay for things that someone wanted but were never approved
  • Also it opens you up to: Fraud, Theft, Embezzlement, etc

Over the years, finance and accounting department business practices evolved to generally include a system of checks and balances to safeguard company interests.

Two major checks and balances are:

Approval Process makes it easier to track down who is accountable for company spending.

Three-way matching is an important step that triple checks your process and allows you to correct oversights or mistakes.

The reason they call it 3-way matching is because there are three documents involved.

  1. The Vendor Invoice – A document to tell you what the vendor wants you to pay and the line items they’re billing you for
  2. The Purchase Order – A document listing out the purchase order number, what you intended to order from the vendor and at what price and correct quantity.
  3. Receiving Document, Receiving Report, Packing Slip – Although it has many different names, it is a document to tell you what you actually received

Automated Solution to Three-Way Match

If you are finding that your accounting department is being overloaded with manual investigations over lost paper invoices or misplaced packing slips, perhaps its time to look into a three-way matching solution that makes the three-way matching process easier and less time-consuming.

Procurify is a viable solution that allows smaller businesses and growing organizations a way to catch duplicate orders and missed invoices in a centralized platform that is accessible, convenient and manageable.

Further Reading

What is Three Way Matching and Why is it Important for Your AP Team?

Understanding Purchase Orders:

All You Ever Need to Know About Purchase Orders

Purchase Order: How To Not Get Sued & All Other Legal Concerns

What is a Non-PO (Non Purchase Order)?

Understanding Invoices: 

What is the Difference Between an Invoice and a Packing Slip?

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