As many higher education institutions have seen the proverbial writing on the wall in the form of decreased funding, they are beginning to look within to find savings and avoid increasing the tuition burden on students and parents, and invoice processing is one place to start. Universities that struggle with these problems don’t do things this way because they prefer to overspend on invoices, or any processes. They do it because they either don’t know how to address the issues, or they don’t realize the value in three-way matching.
Three-way matching is when, before cutting a check, accounts payable compares the invoice, purchase order (PO) and receiving report associated with the order. This comparison serves as a buffer against error and overpayment, as it checks to ensure that the three most crucial points in the process run consistently, without alteration. For example, if the English department requested (purchase order) five reams of paper at $10/ream, the vendor charged them $50 (invoice), and the English department filed paperwork (receiving report) that their $60 worth of paper arrived, and your university does three-way matching, you know you have to have a serious conversation with someone in the English department.