- +39 3406487807
- studioartem@studioartem.it
Content
Three-way matching is an accounting process that compares what was ordered , what was delivered and the supplier’s invoice to verify that an invoice is legitimate and ready to be paid. An automated system can handle the approval process, saving AP staff time and effort left best to investigating unmatched details.
Three-way matching is the process of comparing Purchase Order (PO), Supplier’s Invoice, and the Goods Receipt Note (GRN) with one another before making the payment to the supplier. It is done to eliminate fraud and prevent financial loss by reimbursing only authorized invoices.
It makes spotting these issues easier and creates an audit trail for researching procurement fraud. In some cases, an order is completed over multiple deliveries done on different dates. For orders having multiple delivery dates, it is not possible to match the goods received against the invoice. The automated matching system needs to be configured such that goods received are rechecked on an ongoing basis until the entire order is complete.
The same information is extracted from the PO and GRN and verified against that obtained from the invoice. The verification process is done on each line item on all documents for accurate matching. The 3-way match accounting entries need to be in sync for a successful 3-way matching. If any of the https://www.bookstime.com/ 3 documents fail to match, the invoice payment is put on hold until the discrepancy is resolved. The 3-way match process in accounts payable can be used in SAP, ERP, and Odoo implementations. The 3-way match of purchase orders in SAP enables efficient data processing and invoice verification.
Item names, quantities, and unit costs must match line item costs and total cost. The buyer’s AP department will scrutinize these details and flag any discrepancies. Where discrepancies do occur, stakeholders are sought out for approval and, where necessary, updated or corrected documentation is requested from the supplier.
A 2-way match in accounts payable simply matches the PO to the PO invoice alone. This process does not refer to the packing slip or receipt typically sent with purchases. The purpose of 2-way matching is to verify the organization received the correct items or services at the contracted price. Handling this process manually requires time and human resources, and errors are likely to occur. AP automation ensures the highest level of accuracy in 2-way matching.
As a business owner, the last thing you want to do is pay a fraudulent or inaccurate invoice. Three way matching can help safeguard your accounts payable against incorrect or fraudulently submitted invoices. 3 way matching accounting The average manual processing costs around $12-$30 per piece, which may blow up around five to six digits per month. Each paper used also cost a fortune if computed separately from the service.
