What is 3-way matching in P2P?

What is 3-way matching in P2P?

What is 3-way matching in P2P?

3-way matching in accounts payable is the process of examining supplier invoices to match them against a purchase order and a goods received note and determine whether a supplier invoice should be paid. Control over this important step needs to be vigilant to reduce loss caused by miscalculated or false invoices and payments made for supplies that have not yet arrived. Manually completing this process can be lengthy and potentially leaves 3-way matching open to human error.

Purchase Order (P/O)

A purchase order acts as a receipt between the purchaser and supplier, detailing the quantity of goods that the supplier will distribute, and the price that the purchaser will pay for the goods. The purchaser will be responsible for issuing and finalising agreements for the purchase order.

Goods Received Note (GRN)

Goods received notes act as a record of the goods received from the suppliers. It accounts for how many items were received on delivery compared to the purchase order. This allows the accounts payable team to deduct costs from the original purchase order if goods are missing on delivery.

Matching with the supplier invoice

Supplier invoices need to be assessed alongside the purchase order to confirm the purchase was authorised, as well as the goods received note to verify the amount owed and the payment conditions. If this information all matches, the invoice is sent for payment.

P2P automation with Stratas

By automating the 3-way matching process, the Purchase to Pay (or P2P) system provided by Stratas will not only save money, but more importantly, it can free up to 80% of the workload for the accounts payable team to focus on invoices by exception only. Negating the requirement for manual input in 3-way matching means the possibility for human error in the process is eliminated, ensuring invoices are not overpaid, potentially saving the business from avoidable costs.

Would you like to see how we could streamline 3-way matching for you?

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