The vendor invoice matching process is a control point that is concerned with the invoices received from the vendors before recording the invoice as a liability on the company. There are two types of invoice matching, and they are as follows:
- Three-way matching: This is normally used with inventory items, where three documents are compared: the vendor invoice against the purchase order document and the product receipt document.
- Two-way matching: This is normally used with service items, where two documents are compared: the vendor invoice against the purchase order. This requires manual approval to pass these transactions.
The following diagram illustrates vendor invoice matching:
The basic document in three-way matching ...
