Understanding the 3-Way Matching Workflow in NetSuite: A Guide to Streamlined Procurement Control

The 3-Way Matching workflow in NetSuite is a purchasing control process that ensures accuracy and reduces discrepancies in procurement by matching three key documents before payment is made:

1. Purchase Order (PO) – This document is created when an order is placed with a vendor and lists the items, quantities, and agreed-upon prices.
2. Receiving Document – Often an Item Receipt in NetSuite, this document confirms the quantity and condition of items received.
3. Vendor Bill (Invoice) – This document is the invoice from the vendor detailing the items and amount due for payment.

How the 3-Way Matching Process Works in NetSuite:

1. Purchase Order Creation: The process begins when a Purchase Order is created and approved in NetSuite. This document details the items ordered, quantity, and price per unit.
2. Item Receipt: When the goods arrive, the receiving team records an Item Receipt in NetSuite, verifying the quantity and condition of received items against the Purchase Order. If the receipt matches the PO details, it’s recorded as received.
3. Vendor Bill Matching: When the vendor submits the bill, NetSuite automatically attempts to match it with the PO and the Item Receipt. The system checks that:

• The quantities billed do not exceed those on the PO and Item Receipt.
• The prices align with the Purchase Order.
• Any discrepancies in quantity, price, or item specifics are flagged for review.

1. Discrepancy Review: If there are differences between these documents (e.g., vendor billed for more than received or at a different rate than the PO), they’re flagged for review. In some setups, NetSuite may allow users to set tolerance levels (e.g., allowing a slight difference in price or quantity) for minor discrepancies.
2. Approval and Payment: Once the PO, Item Receipt, and Vendor Bill align (or discrepancies are resolved), the bill is approved, and NetSuite allows the Accounts Payable team to process the payment.

Key Benefits of 3-Way Matching in NetSuite:

• Enhanced Accuracy: Minimizes errors by ensuring that only received and correctly billed items are paid.
• Fraud Prevention: Helps detect and prevent overbilling or duplicate billing.
• Cost Control: Ensures that purchases are consistent with agreed-upon terms and quantities, reducing unnecessary expenses.

This workflow is configurable, and users can set up saved searches and reminders to track bills that require matching or review.