What do you understand by 3 Way matching process?

Question

Accepted Answer

3 Way matching process is a method of verifying the accuracy of invoices by comparing purchase orders, receipts, and invoices.

It involves comparing three documents: purchase order, goods receipt note, and invoice.
The purchase order is created by the buyer and contains details of the goods or services to be purchased.
The goods receipt note is created by the receiver of the goods and confirms that the goods have been received.
The invoice is created by the supplier and contains details of the goods or services supplied and the amount to be paid.
The 3 documents are matched to ensure that the goods or services have been received, the invoice is accurate, and the payment is made only for the goods or services received.
If there are any discrepancies, the 3 documents are reconciled to identify and resolve the issues.
This process helps to prevent errors, fraud, and overpayment.
For example, if a company orders 100 units of a product, receives only 90 units, but is invoiced for 100 units, the 3 way matching process will identify the discrepancy and prevent overpayment.

Top IDP Education Limited Assistant Manager Finance interview questions & answers