3-WAY MATCHING
Financial Dictionary — Procurement & AP Controls
Definition
is the comparison of relevant voucher, purchase order, and receiver.
Detailed Explanation
Three-way matching strengthens controls by comparing the supplier invoice, the purchase order, and the receiving report (goods received note). Payment is approved only when the three documents agree.
Common Uses
- Used in the purchase-to-pay cycle to validate invoices, approvals, and supporting documents.
- Used to strengthen internal controls over purchasing and supplier payments.
- Used to strengthen internal controls over purchasing and supplier payments.
Practical Example
- Example: Before payment, the AP team applies **3-WAY MATCHING** to confirm the invoice matches the approved purchase documentation.
Why This Term Matters
- Why it matters: Prevents incorrect/duplicate payments, reduces fraud risk, and improves accuracy of payables and expenses.