What is a 3 way match in AP accounting?

Answer 1

A 3-way match in Accounts Payable is when the invoice from the vendor is matched against the purchase order and shipping documents before it is posted. Here's an example.

A purchase order is cut to order 1,000 widgets at $1 a piece from Acme Corp. When the 1,000 widgets arrive, the receiving department enters the amount received into the company's system and forwards the packing slip to the accounts payable. When the invoice arrives, the AP clerk will check the amount of widgets listed on the invoice to the amount shown received in the system and on the packing slip, as well as check the per unit price on the invoice to the one on the purchase order. If the invoice shows 1,000 widgets sent, costing $1 a piece for a total of $1,000, then it matches the packing slip and the PO and can be posted. If there are any discrepancies, they must be resolved before the invoice can be properly posted.

Answer 2

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What is a 3 way match in AP accounting?

Answer 3

Doesn't sound like an accounting term I've ever heard of.

The only thing I can think that this Might have anything to do with is:

lets say you have an invoice for $1000 for food you purchased for your restaurant as an example.


Well, When the food was ordered, there should have been some purchase order made up and sent both to your food
supplier, and the accounting department, Signed and authorized by whoever is authorized to buy food.

Next, When the food is delivered to you, there should be
a shipping lable of some sort that shows what is being shipped to you. The people who are receiving the goods sign that everything was received, and this document goes to accounting as well.

Next, the accounting department gets the invoice.

NOW, in reality, if the accounting department pays the invoice, without matching it to both the original sales order, and the statment showing that the same goods were received, they should be fired right???


Therefore, the Invoice to be paid is MATHCHED to the Original Sales Order (which is double checked to make sure it was properly approved, and also MATCHED to the Receiving report (also double checked to make sure it is authorized that the goods in fact were received),

Now that this triple matching or 3 way matching has occured, the accounting department has justification for paying the invoice right??

Tell me, would YOU pay an invoice without making sure that all of the following steps took place?


Mindcrime's answer is pretty much the same as mine, but the emphasis should be on the MATCHING prior to PAYING. Posting is important, but once money is out the door, its out the door right. Lets say you just wrote a cheque to someone based on a $10,000 invoice you received without even trying to verify the invoice????!!!! Then You're screwed right?? You want to make sure everything MATCHES BEFORE PAYING!!!!

An accounting posting error can always just be reveresed!!


Sometimes, this 3 way matching might not even be enough.
For example, at my company there is a hierarchy of purchase signing authority, and certain people have authority to purchase things on their own, but at a certain dollar value, it has to be signed by the president of the company. Also, when goods are received, WHO is signing for them. Is the diswasher or janitor the person who answered the door when the truck showed up, signing for $30,000 worth of food?

These issues are extremely important to consider, especially when you might be the person who not only writes the cheques in the Accounting department, but SIGNS them as well.
We actually had more like a 6-7 way matching process, and I can tell you the friggin battles that happened even then were ridiculous!! People ordering stuff without Purchase orders, making up purchase orders after the invoice came in, not bothering to ensure shipments were correct but signing anyway. All kinds of crap!!!

Answer 4

3 Way Match

Answer 5

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