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Three way matching compares line item details and totals across purchase orders (PO), receipts for good, and vendor invoices sent to the customer. Automating 3-way matching is simple when you upgrade to Planergy’s e-procurement system. Without any human intervention, issues are brought to light early so you don’t slow down the payment process.

Invoice fraud is a rampant problem for businesses today, and has resulted in companies losing over $2 billion. Fraudsters can send fake invoices which closely resemble legitimate invoices and without strong checks like 3-way matching, these invoices will get paid, and you might end up losing money. A great way to eliminate fraud is by automating your procurement process. It ensures that the quantity and price of items are the same across three documents. These documents are the purchase order, the delivery receipt, and the supplier’s invoice.

Way Matching Automation

In accounts payable, three-way matching is an internal control process that ensures invoices, purchase orders, and receiving reports all have consistent line item details. The “match” part of the three-way match refers to comparing the quantities, price per unit, terms, and other information appearing on the three documents. In other words, does the vendor’s invoice detail agree with the organization’s purchase order, and to the goods actually received as shown on the organization’s receiving report? Only if the details on the three documents are in agreement will the vendor’s invoice be entered as an account payable. Although three-way matching has major drawbacks, its benefits can really help your AP. By using this system, your business can avoid fraudulent invoices and incorrect payments.

These issues are easily addressed with the right automation solution. While AP automation saves businesses thousands of dollars on manual approval process costs, that’s not the only benefit to automation. The right platform can save you time on needlessly complex procurement processes three way match accounting that eat up your schedule. Companies that choose to employ three-way matching do so to reduce mistakes, catch illegal activity, and save money. However, with a manual process, even when trying to avoid overpaying, businesses can often end up with much higher processing costs.

Ways to Make Three-Way Matching More Efficient

The purchase order number should also include any applicable terms and conditions. Any information that needs to be corrected should be fixed before the order is sent to the supplier. A business can benefit from three-way-match processing in several ways. Then the AP clerk cross-references the GRN to verify that 10 monitors were, in fact, delivered.

The 3-way match helps organizations avoid AP issues by resolving any possible mismatches on bills and orders before payments are processed. Automated systems can reduce the time required to complete the matching process, as the documents are scanned and compared quickly. Automated three-way matching also helps to reduce the risk of human error.