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ACCA Applied Knowledge · Business and Technology · The relationship between accounting and other business functions

Before a supplier's invoice is approved for payment, the accounts payable team compares the invoice with the purchase order and the goods received note. What is the main purpose of this three-way match?

The three-way match checks the supplier invoice against the purchase order and goods received note so the company pays only for goods it ordered and actually received, at the agreed terms. It is a control against error, overpayment and fraudulent invoices.

  1. ATo negotiate a prompt payment discount with the supplier
  2. BTo confirm that the company is paying only for goods it ordered and actually receivedCorrect
  3. CTo determine the economic order quantity for future orders
  4. DTo select the supplier with the lowest price

Explanation

Matching invoice, order and receipt evidence ensures the goods were authorised and received, and invoiced at agreed terms. This is a control against overpayment and fraud. It does not set order quantities, negotiate discounts or choose suppliers.

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