2017-02-15 00:00:00BookkeepingEnglishLearn about three-way matching. Review the benefits of this accounting technique, and learn how to use three-way matching without causing...https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Two-female-accountants-discuss-three-way-matching-in-accounting-office-near-laptop-and-notepad.jpghttps://quickbooks.intuit.com/ca/resources/bookkeeping/three-way-matching/Utilize Three-Way Matching

Utilize Three-Way Matching

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Three-way matching is an accounting process that helps ensure your business never pays a fraudulent invoice. This process involves matching the invoice with the relevant purchase order and the receiving report. Imagine you have an invoice from a supplier. Instead of just cutting a cheque to pay the invoice, you look at the purchase order to ensure the purchase was approved. You also double check the quantities and amounts on the purchase order to make sure they match the details on the invoice. Then, you compare the information on the invoice to your receiving report. Finally, if these three documents agree with each other, and you received the supplies as expected, you write the cheque to the supplier. Three-way matching reduces losses related to errors on invoices, double billing, and fraudulently submitted invoices. However, the process can be time consuming as you have to pull up purchase orders and receiving reports every time you pay an invoice. In some cases, these delays can cause your business to incur late penalties or miss discounts for early payment. To reap the benefits of three-way matching while also safeguarding your time, you may only want to do three-way matching on invoices over a certain amount. Alternatively, you may want to auto-approve all invoices within a certain percentage of the original purchase order or receiving report, rather than spending time tracking down very small inconsistencies.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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