What does a three-way match typically involve in procurement?

A three-way match is a critical control mechanism used in procurement processes to ensure that the transaction details align before payment is made. It typically involves comparing three key documents: the invoice, the purchase order, and the receipt of goods or services.

The purchase order is the document that initiates the transaction and specifies what goods or services are being ordered, including quantities and agreed prices. The receipt is the document that confirms that the goods or services have been delivered in accordance with the purchase order. The invoice is presented by the supplier requesting payment for the goods or services provided.

The three-way match ensures that:

1. The invoice matches the purchase order in terms of quantity and price.

2. The receipt confirms that the goods or services were indeed received.

3. Payment is only made when there is an agreement among all three documents, reducing the risk of discrepancies and potential fraud.

This process is essential for maintaining accurate financial records, ensuring that payments are made for the correct amounts, and facilitating effective inventory management.