Three Way Match Invoice Processing Definition

When an organization receives an invoice, the first step in the three way match invoice processing definition is to check that the correct PO number is present on the document. If it’s not, then the AP department will contact the vendor to request a corrected invoice. Once the updated invoice is received, it will be matched to the original PO.

If the PO number is present and correct, the next step is to check that the invoice amount matches the amount specified on the PO. If there’s a discrepancy, AP will reach out to the vendor for clarification. Once the issue is resolved, either by receiving a corrected invoice or by confirming that the original amount was correct, the AP team will move on to matching up the invoiced items with the items listed on the PO.

This final step ensures that what was ordered was actually received and billed for correctly. If there are any discrepancies, AP will work with both the vendor and internal stakeholders to resolve them before processing payment.