THREE WAY MATCHING-account payable

The reason I would like to write this small article that because I have just been tested one of basic accounting theory. Super surprise, I have been working in accounting and finance department doing account payable on and off over last a few years, I don’t know the technical term of all the matching I did in the past. I was going to blow up my head! Now I did my search, I would like to share with anyone, who doesn’t know the technical term.


Three-way matching is a payment verification technique used by the accounts payable department. When this group receives an invoice from a supplier, it matches the following information:

The information on the supplier invoice to a copy of the related purchase order that has been forwarded to it by the purchasing department. The purchase order states the quantity and price at which the company agrees to buy the goods or services stated on the supplier’s invoice.
The supplier invoice to receiving documentation forwarded to the accounting department by the receiving department, to ensure that the goods have been received, that they are in the correct quantity, and that they are in good condition.
Thus, the “three-way match” concept refers to matching three documents – the invoice, the purchase order, and the goods receipt report – to ensure that a payment should be made. The procedure is used to ensure that only authorized purchases are reimbursed, thereby preventing losses due to fraud and carelessness.

If this three-way match reveals that the supplier invoice is in good order, then the accounts payable staff processes the invoice for payment. If not, the staff contacts the supplier regarding any issues it found, which may result in the issuance of a revised invoice or perhaps a credit memo by the supplier.