What is Three-Way Match?
For retailers and purchasers alike, it is important to verify that an order is correctly and completely fulfilled without heavily interrupting the ordering process. A common way to do so is through three-way matching, a method of checking an invoice for an order against the purchase order and receiving report to minimize error in payment. This practice serves to help businesses keep up with their operations without sacrificing thoroughness, especially as documents and payments are able to move increasingly fast between firms. From the standpoint of the retailer, three-way match could also be an indispensable part of security.
Why is the Three-Way Match Important?
Although it is easy to assume the security of a retailer primarily involves monitoring customers in the store, a vendor can easily shortchange them and be overlooked without practices like three-way match to confirm the order is in its full amount. As a business begins to scale, making and receiving more orders, this sort of practice becomes increasingly necessary.
How is it Implemented?
With such clear benefits to using three-way match, why wouldn’t a firm implement it at the first opportunity? While the perks of the matching process create direct, measurable avenues to saving money, the costs that will be incurred are just as clear with few ways to mitigate them. To organize the three documents to be matched, ensure they are filled in a standardized manner, and take action if there is an error in one of them requires the attention of an employee. This creates a time sink, likely for those working with the firm’s accounts payable, creating a glaring opportunity cost. Additional costs to pursuing three-way match in this way could include inefficiencies as more time and money is needed to physically print and file documents. With these costs in mind, it becomes difficult to imagine a balance between dedicating the necessary resources to three-way match and incurring fewer costs.
What’s New with Three-Way Match?
In response to this balance being so difficult to achieve, with emerging technologies for filling and receiving orders complicating things further, developers of various technologies used in business have started to consider three-way match as they build their platforms. ERP software may be the first to come to mind when thinking of areas where the process could be implemented within existing software, but few applications have included such a feature at this point. Instead, it appears to be emerging far more quickly among Accounts Payable platforms, as it is becoming more and more common. With this being the case, it may be a good idea to consider using an accounts payable application or reevaluating one already in use to see if getting an automated means of three-way match could benefit your business. In addition to solving some of the issues mentioned earlier like the difficulty scaling while matching manually and having to reallocate employee time, automating three-way matching in this way is far easier to organize and integrate with existing technology. By reducing these difficulties, AP automation of three-way match makes it a much more viable practice for businesses of different sizes.
How Do I Begin to Think About Three-Way Match?
With these considerations in mind, is the use of three-way match the best decision for your business? For retailers, the answer is likely yes, as there is much to be gained by ensuring that each order is fulfilled and processed properly. For a business that makes fewer orders, the answer will have more to do with the size of the business and the pace of scaling. As more transactions are made, adopting three-way match will become more beneficial, with the decision of whether to do it manually or automatically varying between firms. In a world where more transactions are made by more people, it becomes especially important to ensure they are made correctly.