What is 3-way matching in AP and why do you need to implement it?

It also provides an opportunity for you to request an adjustment to the invoice in the case that any goods were delivered that were below quality standards. If not, you’re simply adding additional work to the mix, slowing down your accounts payable employees’ ability to work efficiently and effectively. GEP NEXXE is a unified and comprehensive supply chain platform that provides end-to-end planning, visibility, execution and collaboration capabilities for today’s complex, global supply chains. Built on a foundation of data, artificial intelligence and cognitive technologies, GEP NEXXE helps enterprises digitally https://primalex.com.ua/an-efficient-deep-learning-based-approach-to/ transform their supply chains and turn them into a competitive advantage. The system flags discrepancies for review, ensuring that any issues are resolved promptly.

• A 3-way match also helps decide if an invoice should be paid partly or in full.
• This reliability strengthens supplier relationships, especially with vendors who rely on consistent cash flow.
• A car manufacturer wanted to a order 200 lithium-ion batteries and have them delivered to his plant.
• Automated systems can continually improve their matching algorithms by utilizing machine learning and AI, further enhancing reconciliation accuracy and speed.
• Nothing can take the wind out of your sails like manually matching printed POs with invoices and packing slips.

Employee purchasing portal

• This method allows the company to flag issues before processing payments, ensuring accuracy and control during reconciliation.
• These systems guide each invoice through a predetermined process, from receipt to approval, with built-in logic that handles common scenarios.
• Put all that together and you get a smarter three-way matching solution that eliminates error 100 percent at a fraction of the time and at even lesser cost.
• To ensure that every order is complete, 3-way matching highlights discrepancies or inconsistencies between any of these critical documents.
• With over 10 successful procurement and accounts payable related automations, Cflow is definitely the best choice for automating the 3 way matching in accounts payable.
• The quantity billed (in the invoice) should match the quantity ordered (in the purchase order).
• The goods received note includes details of the delivered goods that have been included in the shipment as well as the payment method.

A successful three-way matching process relies heavily on the knowledge and competence of the people involved. All relevant personnel—from procurement officers and warehouse staff to AP clerks—must understand the importance of document accuracy and timely submission. Training programs should cover the lifecycle of a transaction, the significance of each document, and the correct procedures for entering and verifying data. Strong internal communication is vital to a smooth three-way matching process.

way matching in accounts payable

Designed for growth-oriented businesses, Moon Invoice alleviates the burden of managing business finances. If each piece of paper used was calculated independently from the cost of the service, bookkeeping it would amount to a fortune. When looking at other ways, such as automated processing, it is possible to use up a significant portion of the money that was set aside for human treatment.

Approval workflows

• A goods receipt note is a document that confirms the acquisition of goods or services.
• Invoice fraud is a rampant problem for businesses today, and has resulted in companies losing over $2 billion.
• This involves communicating with vendors or internal departments to clarify issues and take corrective actions.
• Not just large purchases, but high value transactions can be thoroughly vetted by this process.
• With the goods receipt note, you can prove that you actually only received 10 and not that they sent and billed for 11 (in which case, they’d probably request that you return one).

A 3-way matching involves reconciling purchase orders (PO), goods receipt notes, and supplier invoices. This process helps prevent fraud, save costs, and ensures a robust audit trail. A 3 way match is an internal control process that cross-references a supplier’s invoice against its corresponding purchase order (PO) and good received note (GRN). As businesses grow and the volume of transactions increases, managing accounts payable manually becomes a significant bottleneck. The three-way matching process—while effective in ensuring payment accuracy—can be time-consuming and error-prone when done by hand. The need for scalable, efficient, and accurate invoice processing has made automation a critical solution.

Maintain clear SOPs (standard invoice matching operating procedures) that are accessible to all AP team members. Implement a regular (e.g., quarterly) review of all policy documents to ensure they reflect actual current processes. Automated systems can quickly compare documents, identify discrepancies, and flag them for review, leading to improvements in your entire financial workflow. This entire investigation and resolution process might take a few days, potentially delaying payment to the vendor.