The purchasing department is one of the most sensitive in a company. This is because it involves money management that, if not done optimally, can affect the organization's finances. To avoid inconveniences, and even possible fraud and irregularities, there are features such as Three way match.
What is Three way match?
A verification technique used to manage accounts payable. It ensures that the company only pays for services rendered and goods delivered in a legitimate manner. It consists of matching purchase orders with the goods receipt note and the supplier's invoice.
The process Three way match focuses on the observation of the above documents to verify that the company actually ordered the goods or services referred to in the invoice and that it did in fact receive them. By performing this verification, it can be determined whether the invoice is legitimate or fraudulent.
Critical documents to manage payments
Purchase order
It is considered the official confirmation of an order. It is sent by the purchasing company to the supplier. This document usually includes the name of the purchasing company, date, description and quantity of the goods and services ordered, price, mailing and billing address, payment information, and purchase order.
Order entry note
It is the proof of delivery and what secures payment. This receipt details what has been shipped and usually includes the same information as the invoice, as well as the method of payment.
Invoice
This document requests payment for a purchase, and is sent by the vendor. They include the purchase order information, as well as the invoice number, the supplier's contact information, total amount due, as well as any credits or discounts for prepayments.
In this way, the accounts payable team cross-checks the documents to determine that what was requested through the purchase order matches the goods received as specified in the receipt. In turn, it compares this receipt with the invoice sent by the seller.
Why use the Three way match?
This functionality is beneficial to your business because:
- Avoid loss of money. By doing this verification and making sure that they are indeed consistent, you help prevent fraud or loss of financial resources.
- Guarantees transparency. Allows all transactions to be clear.
- Improved supplier relations. By having more transparent processes, they will feel that they are working with companies that offer security in their transactions and that there is no risk of participating in crimes such as money laundering.
- Prepares companies for audits. This ensures that the organization has no financial discrepancies.
How to implement the process Three way match?
Verifying the matching of purchase orders with purchase notes and invoices manually is not an efficient process. Therefore, there are digital solutions such as B2B PortalThe system is designed to help you comply with legal requirements and streamline accounts payable. Includes the Three way match to make sure everything is in order.
If you want to take advantage of the benefits offered by this tool and avoid financial and fiscal inconveniences in your organization, contact us!
