Explain the entries and differences between 2-way matching and 3-way matching.

Question

Accepted Answer

Two-way and three-way matching are processes used in procurement to ensure accuracy in invoices and purchase orders.

Two-way matching involves comparing the purchase order and the invoice to ensure they match.
Example: If a company orders 100 units of a product for $10 each, the invoice should reflect the same quantity and price.
Three-way matching adds a third document, the goods receipt, to the process, ensuring that the goods received match the purchase order and invoice.
Example: If 100 units were received, the purchase order, invoice, and goods receipt should all confirm this quantity.
This process helps prevent overpayments and ensures that the company only pays for what it has received.

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