If an error occurs, no payment is sent out from the purchaser until the mismatch in information has been resolved. This puts the responsibility of error in favor of the customer onto the vendor, and exists in delivery-based manufacturing far more than one might assume. The default setting for all invoices is 2 way matching, if 3 or 4 way matching is required it must be set on each purchase order when it is created.

• Manual matching of thousands of supporting documents can be time-consuming, expensive and extremely labour-intensive.
• Automating the 3-way match in the accounts payable process brings transparency and consistency to the accounts payable process.
• If everything matches, the supplier’s invoice will be approved for payment.
• According to a 2022 survey, 58% of AP departments report being targeted by email scams that include fake invoices or wire transfer information.
• But companies are increasingly adopting three way matching to add an additional layer of verification and prevent overspending.
• In the case of a discrepancy between these three essential documents, the AP department halts the purchasing process and aims to resolve the issue.

Automating 3 way matching and the accounts payable approval workflow would help AP teams focus on higher value tasks and save them from a mountain of manual paper work. The 2 way matching process Three-way matching is the default approach to verify invoices across organisations. But companies are increasingly adopting three way matching to add an additional layer of verification and prevent overspending.

Improved Profitability

A purchase order is to be verified by the purchasing department to verify the supplier’s name, date, quantity, address, payment information, and the amount. Although 2-way matching is the default for many invoice verification processes, 3-way matching is becoming more widely adopted to save businesses from overspending on larger, non-recurring orders. Book this 30-min live demo to make this the last time that you’ll ever have to manually key in data from invoices or receipts into ERP software. If errors are flagged in the 3 way matching process, the invoice is put on hold and payment is withheld.

The 3-way match helps organizations avoid AP issues by resolving any possible mismatches on bills and orders before payments are processed. The essence of https://business-accounting.net/ is to eliminate fraud, and to ensure all incoming invoices are properly vetted before making payments on them. It is a system for vetting invoices to reduce any instances of invoice fraud.

How Bright Peak Therapeutics Built their Procurement Process from the Ground Up

The automated matching system needs to be configured such that goods received are rechecked on an ongoing basis until the entire order is complete. Verification of the goods received against the goods ordered and billed should be done at the end of the order. The intent of the 3-way matching is to ensure that the goods ordered, goods received, goods billed, order price and the billed amount are consistent across the PO, GRN, and invoice. Manual verification of information on various documents is a time-consuming process.