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3-WAY MATCH The process that verifies your payments and avoids losses.



By: SAP Consulting Leader


What is a 3-way match? It is a procedure where an invoice is issued and ensures that the payment is accurate and fully completed. The goal of a “3-way match” is to avoid divergences in the purchasing process and losses, it also prevents mismanagement of funds.


The name “3-way match” comes from the 3 documents in the purchasing process involved that are crucial for its correct execution: purchase orders, goods receipts, and invoices.

Here is a brief explanation of them.


A Purchase order is a document that confirms a request, it is sent through the purchasing team to the suppliers indicating the authorization of a purchase and usually indicating details, such as name of the buyer, description of the product and/or services required, quantity, date, delivery address price, as well as purchase order number.






Goods Receipt is proof of delivery and payment. The receipt includes the goods and/or service that was given to the buyer, detailing what and how it was delivered.









The Invoice is the formal request for payment of the purchase. You can find the same information as in the purchase order, in addition to the invoice number, contact information of the seller, credits, discounts, and the total to be paid.







Why use it? Because it identifies and highlights any difference between the 3 sources of information, showing you each invoice with the 3 linked documents, this way you have a more complete and clear view.


One of the areas with the greatest discrepancies in the accounts payable, with that being said the recommendation is to apply this process to solve problems such as double charges, higher prices than agreed or charges for undelivered goods, it also benefits reviewing in less time and with more certainty to have the precise information.


Having errors continuously in these documents can mean a serious internal problem and give an image of low capacity in your services, causing rework in both internal and supplier processes, as well as causing delays with significant financial consequences, so you can improve the relationship with your suppliers using this tool. Therefore, the wide visibility of the best suppliers can be obtained.


If you are preparing your business for an audit in these processes, the auditors mainly focus on finding discrepancies in the account statements. Providing these documents in advance is to go one step further streamlining this process.


A "3-way match" does not require human intervention, any error is identified early avoiding stalemates or delays in the payment process. The process cost is significantly reduced and much more important, it will be possible to invest this time in executing other high-value work activities.


Trends show that the future of the purchasing process will be automated as organizations want this process to be extremely efficient, fast and transparent. This procedure is a great help to route the entire purchasing process to make it more efficient, it eliminates all the common manual steps between the order and the payment of purchased goods. Saving many hours in the process, both suppliers and customers benefit. With the right tools, they can even set up automatic credit notes. These notes are sent automatically if the provider charges more, which saves them one step.


With all these benefits it must be recognized that there is a fragile side and it is the amount of work that should be invested. The collection and review of the necessary documentation require extensive hours of a thorough review, this can translate to a possible delay in the execution of payments affecting the area in charge of the activity that is regularly, accounts payable. Although a "3-way match" has one flaw described above, its benefits are a great value for the correct and transparent execution of payments and invoices, which leads to a state of security in the financial health of any business.


3-way match flow


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