What is 3 way matching?

3 Way Matching represents a comprehensive approach to procurement and accounting that goes beyond the standard 2 Way Matching process. In addition to comparing the supplier invoice to the purchase order, it introduces a third critical document into the equation: the receiving report or goods receipt.

This extended process ensures not only the accuracy of quantities and prices but also verifies that the goods or services have been physically received and accepted by the organization. The three-way comparison serves as a robust quality control mechanism, safeguarding against errors, fraud, and discrepancies. It provides assurance that the organization is paying for goods or services that have been delivered and meet the expected quality standards.

By implementing 3 Way Matching, businesses enhance the accuracy and reliability of their procurement and payment processes. This approach helps maintain trust with suppliers and minimizes the risk of financial losses due to payment for undelivered or subpar goods or services.