Three Way Match Purchase Order Definition
In business, a three-way match is when the purchase order (PO) from the buyer matches the invoice from the supplier, and the receiving report from the receiving department. This is also called a ‘triple match’ or an ‘invoice matching triad.’
The three-way match is important because it ensures that all parties involved in the transaction are in agreement about what was purchased, how much was purchased, and that the goods were received as expected. This verification process helps to prevent errors and misunderstandings, and can be used to resolve disputes if they arise.
There are four main elements to a three-way match:
1. The purchase order: This document is created by the buyer and includes details about the products or services being ordered, along with quantities and prices.
2. The invoice: The supplier sends this document to the buyer once the products or services have been delivered. It includes details about what was delivered, along with quantities and prices.
3. The receiving report: This document is created by the receiving department once the products or services have been received. It includes details about what was received, along with quantities and prices.
4. The payment request: Once all three documents have been matched and approved, the buyer will issue a payment request to pay for the products or services that were received.
