You Paid A Fraudulent Invoice Last Week

In Accounts Payable, one of the most critical processes for controlling cash outflows and preventing fraud is the 3-way match. It may sound like accounting jargon, but it’s simply a method of verifying that your business only pays for goods and services it actually ordered and received. Without it, you risk paying incorrect, duplicate, or even fraudulent invoices.

This happens more often than you think and if you don’t have an approval process in place, you’re putting your business at risk.

So, what is a 3-way match?
It’s the practice of comparing three key documents before approving an invoice for payment and sending funds out the door:

• Purchase Order (PO): The official order your business issued, specifying the items or services requested, quantities, and agreed pricing.

• Receiving Report (Goods Receipt): Documentation that the goods or services were actually delivered, received, and accepted.

• Vendor Invoice: The bill from the supplier requesting payment that aligns to the above.

The invoice is only approved and scheduled for payment if all three documents match — quantities, descriptions, and pricing. Many companies I’ve chatted with skip this process.

Why each document matters:

• Purchase Order: Prevents unauthorized or accidental orders. It sets the expectation up front on what you agreed to buy and how much it should cost.

• Receiving Report: Ensures the goods or services were actually received. Without this step, you could end up paying for items that never showed up.

• Vendor Invoice: Confirms the supplier’s request aligns with both what was ordered and what was received. If it doesn’t, the invoice is flagged for review.

Why the 3-way match protects your business:

• Prevents Overpayments: Ensures you only pay for what was received, at the right price.

• Stops Fraud: Blocks fake or duplicate invoices from being processed. Super common in today’s business environment with various automation and AI capabilities.

• Controls Cash Flow: Eliminates surprises by tying payments directly to approved purchases.

• Strengthens Vendor Relationships: Clear, consistent processes reduce disputes with suppliers.

• Builds Audit-Ready Records: Creates a trail that shows payments were valid and properly authorized before being released.

Make Your Ascent With Confidence

For those looking to climb to the top, only the best will do. Peak Bank’s high-yield savings account delivers exactly what savvy savers need, helping you go higher than ever before. Earn up to 4.35% APY* today when you join Peak Bank.

Apply Online Today

_{Member FDIC}

Skipping this process may seem like it saves time to many of you small business owners, but it opens the door to costly errors as you grow. For small and veteran-owned businesses, where every dollar matters, a disciplined 3-way match can be the difference between steady operations and financial strain.

Think of it as your Accounts Payable safety net. By making sure purchase orders, receipts, and invoices line up every single time, you protect your cash, your credibility, and your business’s financial health.

Sponsoring the Cash Flow Chronicles today is I HATE IT HERE!

Thank you for supporting our newsletter. Each time a reader engages with our sponsor’s ad, this directly supports CFC’s mission to be the TOP FINANCIAL newsletter Beehiiv has to offer.

Even if you do not buy a product, subscribe, etc. this greatly supports our mission. Take 5 seconds today and check them out!

The free newsletter making HR less lonely

The best HR advice comes from people who’ve been in the trenches.

That’s what this newsletter delivers.

I Hate it Here is your insider’s guide to surviving and thriving in HR, from someone who’s been there. It’s not about theory or buzzwords — it’s about practical, real-world advice for navigating everything from tricky managers to messy policies.

Every newsletter is written by Hebba Youssef — a Chief People Officer who’s seen it all and is here to share what actually works (and what doesn’t). We’re talking real talk, real strategies, and real support — all with a side of humor to keep you sane.

Because HR shouldn’t feel like a thankless job. And you shouldn’t feel alone in it.

Sign Up Free