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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