Three-Way Match Accounts Payable Definition
The three-way match accounts payable definition is when the buyer, seller, and their bank reconcile the differences in what was invoiced, what was shipped, and what was received. This process ensures that everyone is on the same page and that all parties involved are happy with the transaction.
The first step of the three-way match is to compare the invoice from the supplier with the purchase order from the buyer. The second step is to compare the packing slip from the supplier with the receiving report from the buyer. The last step is to reconcile any differences between these documents.
If there are any discrepancies between these documents, it is up to the accounts payable department to investigate and resolve them. This process can be time-consuming, but it is essential to maintaining accurate financial records.
