Three Way Match Accounts Payable Definition

The Three Way Match is a method used in Accounts Payable to verify that the correct vendor invoice is being paid, and that the correct amount is being paid for the correct quantity of goods or services received. This process consists of matching the purchase order, receiving report, and vendor invoice for each transaction.

The first step in the Three Way Match is to match the purchase order to the receiving report. The purchase order will list the items or services ordered, along with the quantities and prices. The receiving report should show that the same items or services were received, and in the same quantities. If there are any discrepancies, they should be resolved before moving on to matching the vendor invoice.

Next, match the vendor invoice to the receiving report. The invoice should list the same items or services as what was received, and in the same quantities. The prices on the invoice should also match what was listed on the purchase order. If there are any discrepancies between the vendor invoice and either the purchase order or receiving report, they should be resolved before payment is made.

Finally, match the vendor invoice to the payment document (check or electronic payment). The payment document should include all of the information from the vendor invoice: itemized charges, quantities, prices, etc. Once all three documents have been matched and reconciled, payment can be made.