Three-Way Match
Definition
An accounts-payable control that requires a supplier invoice to match an authorised purchase order and a goods receipt note before payment is released. The match is designed to verify that goods or services were ordered, received, and correctly priced before money leaves the organisation.
- Documents matched
- Purchase order, goods receipt note, supplier invoice
- Domain
- Accounts payable, procure-to-pay controls
- Checks
- Item, quantity and price agree across all three
- Fraud it blocks
- Payment for goods never ordered or never received
Common questions
How do fraudsters get around a three-way match?+
Common methods include colluding with a receiving clerk to file a false goods receipt note, splitting a large purchase into several below-approval-limit orders, or setting up a fictitious vendor whose invoices are approved by the same person who created the purchase order.
What is a two-way match and why is it weaker?+
A two-way match compares only the invoice to the purchase order, without confirming goods were actually received. It approves payment on paperwork alone, so it cannot catch invoices for items that were never delivered.
Related terms
- Benford's Law
- An empirical regularity in naturally occurring numerical datasets: the leading digit follows a logarithmic distribution, with 1 appearing about 30% of the...
- Duplicate-Payment Analysis
- A data analytics test that identifies invoice payments made more than once for the same obligation, by matching on vendor, invoice number,...
- Pass-Through Scheme
- A billing scheme in which a legitimate supplier is used as a conduit. The fraudster, who controls or colludes with the supplier,...
- Shell Company
- A legal entity with no genuine business operations, created to receive fraudulent payments. In vendor fraud, the fraudster controls the shell and...
- Vendor Master File
- The master record of approved suppliers in the accounts-payable system, containing each vendor's name, address, tax identification, and payment bank account. Unauthorised...