What does the Three Way Match process involve?

The Three Way Match process primarily involves comparing and matching three critical documents: the invoice, the purchase order, and the receiving document. This process ensures that the company only pays for goods or services that have been ordered, received, and invoiced correctly.

When an invoice is received from a vendor, it must be matched against the corresponding purchase order, which contains details of what was ordered including quantities and prices. The receiving document, often generated when the goods are delivered, confirms what has actually been received in terms of quantity and quality.

By conducting this thorough comparison, discrepancies can be identified before any payments are processed. For instance, if the invoice shows a higher quantity of items than what was received, or if the purchase order specifies a different price than what is billed, the payment can be withheld until these issues are resolved. This process plays a crucial role in maintaining accurate financial records and preventing errors in accounts payable.

The other options, while related to the broader context of financial controls and vendor management, do not encompass the specific checks and balances integral to the Three Way Match process.