Four Way Matching In Accounts Payable Definition

In accounting, four way matching is the process of verifying that an invoice matches the purchase order, receiving report, and contract for goods or services. The purpose of four way matching is to ensure that invoices are accurate and authorized before they are processed for payment.

The first step in four way matching is to match the invoice to the purchase order. The purchase order should include all of the relevant information about the goods or services being purchased, including the description, quantity, price, and terms of payment. The invoice should include this same information. If there are any discrepancies between the two documents, they should be resolved before moving on to the next step.

The second step is to match the invoice to the receiving report. The receiving report should indicate that the goods or services specified on the invoice were actually received by your company. If there are any discrepancies between the two documents, they should be resolved before moving on to the next step.

The third step is to match the invoice to the contract. The contract should specify all of the terms and conditions of the purchase, including the price, quantity, delivery date, and terms of payment. The invoice should include this same information. If there are any discrepancies between the two documents, they should be resolved before paying the invoiced amount.

Four way matching is a critical part of accounts payable management because it helps to ensure that invoices are accurate and authorized before payments are made. By taking these three simple