Integrating automatic three-way verification into the accounts payable procedure is an excellent protective method from overpaying for products and services or making a payment on a fake invoice. A growing number of corporate leaders and departments responsible for the company's finances are turning to three-way match processing to reduce risk and rein in expenditure at their organizations. In addition, the AP team applies different validations or business rules within organizations, such as Vendor Validation, PO Matching, G/L Account Validation. The use of three-way matching can assist in protecting the accounts payable from being exposed to fraudulent or incorrectly submitted invoices. When someone operates a company, the last thing they want to do is pay an invoice that is either false or erroneous. 3-way matching is a process in which purchase orders are matched with goods received notes and the invoice sent by the supplier. A retained invoice is a fail-safe that prohibits payment of an order that has not been matched with a customer and is not confirmed. If they do not, the invoice will be put on hold, and payments will not be made until the hold is lifted or the issue is resolved. The invoices must fall within the matching limits for the verification to succeed. 3-way matching provides an increased level of accuracy and visibility that is more likely to catch discrepancies between documents and thus is favored by. This standard practice is known as a "three-way match."Ī three-way match can assist in deciding whether only a portion of the invoice should be paid or the whole amount should be paid. As the order receipts and vendor invoices are two standard documents required for audits, ensuring they are error-free and complete makes auditing and bookkeeping easier. By closely reviewing documentation data like quantity, line item, unit cost, the AP team is able to ensure that what is approved for disbursement is accurate. A three-way match compares for accuracy three documents in the buying transaction process. Here are some key benefits of 3-way matching: Simplifies auditing. Three-way matching is an accessible middle ground to two-way and four-way. Before agreeing to pay an invoice from a supplier, the purchase order, goods receipt note, and invoice from the supplier are compared. It helps streamline payment processes, mitigate human errors, and digitally exchange business documents. A three-way match is an accounting control that ensures that the purchase order, inventory receipt, and invoice all match in terms of product, quality, quantity.
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