The 3-way invoice matching process is a method in accounts payable that ensures accurate payments by verifying three essential documents: the purchase order (PO), the receipt of goods or services, and the supplier’s invoice. In this process, these three documents are cross-checked to ensure consistency in order details, quantities, and prices before a payment is made.
The process works by first matching the purchase order with the invoice to confirm that the items listed in the invoice were actually ordered. Next, it checks whether the goods or services were received by comparing the goods receipt against the purchase order and the invoice. This comparison helps verify that the correct quantities were delivered and that they align with what was initially requested.
This matching system minimises errors, such as overpaying for goods not received, or paying incorrect amounts. It also helps prevent fraudulent activities by flagging any discrepancies between the documents, which could indicate an issue that needs investigation.
Why 3-Way Invoice Matching Matters
Although 3-way invoice matching can add a layer of complexity to the accounts payable process, it plays a crucial role in maintaining financial accuracy. Implementing automation in the process can speed up the verification, reduce manual errors, and ensure that payments are only made for legitimate, verified transactions.
By maintaining transparency and accuracy, the 3-way matching process strengthens internal controls and ensures that businesses are not paying for goods or services that are incorrect, incomplete, or fraudulent. It’s a key step for companies looking to protect their cash flow and maintain strong relationships with suppliers.
Learn more about B2BE’s Three-Way Matching solution.
About B2BE
B2BE delivers electronic supply chain solutions globally, helping organisations to better manage their supply chain processes, providing greater levels of visibility, auditability and control. We’re driven by a passion for what we do, inspired by innovation, and underpinned by a wealth of knowledge. With over 20+ years of experience, the B2BE teams operate worldwide.
For more information, visit www.b2be.com.