![]() Three-way matching is a straightforward process - that is, an AP clerk compares the three components, listed above. Supplier’s invoice, which lists how much the buyer owes the supplier, payment details - such as a payment schedule - and an invoice number.Delivery receipt, or a receiving report, which confirms that the purchase was delivered, either in part or in full.The PO has a unique number that is used for reference and tracking purposes. ![]() It lists the types, quantities and prices of an order, as agreed to by the buyer and supplier. Purchase order, which authorizes a purchase to be made.Simply put, three-way matching requires the details of three pieces of documentation to match. If one or more details fail to match, another AP process is triggered to investigate the discrepancies. Once the information is validated, payment can be sent. Three-way matching is a payment verification technique that compares the details associated with a particular purchase across a trio of related documents. (They recovered their money.) Smaller businesses, however, would be less likely to withstand such a scam. To be sure, invoice fraud can happen to the biggest of organizations: Just a few years ago, for example, Google and Facebook both issued multimillion-dollar payments for fake invoices sent by a cybercriminal in Lithuania. These few extra steps can go a long way toward catching the costly problem of invoice fraud. Three-way matching confirms that the details match each other across all three documents. The delivery receipt verifies that the delivery was made. A PO also lists the quantity of items or services to be purchased and the agreed cost. Three-way matching is an important account control that companies use to make sure invoices are paid only when they are properly validated against two other documents: their POs (issued by someone authorized to do so) and goods received notes, or receipts, that the purchase was delivered to its destination. Doing this can help companies root out fake or unauthorized transactions, which can cost a company an estimated 5% of its annual revenue, according to the ACFE report. Simply put, three-way matching entails cross-referencing the invoice with its corresponding purchase order (PO) and delivery receipt to make sure all pertinent details, such as the quoted order amount and the number of items ordered, match. Three-way matching is an AP invoice process that determines whether a supplier invoice should be paid.
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