Since we have walked through purchase order, can you explain three-way matching?

Three‑way matching is a control process used in accounts payable to verify that the purchase order, the goods receipt, and the vendor invoice all match before payment is authorized. First, the purchase order (PO) records the agreed price, quantity, and terms. When goods are received, a goods receipt (GR) document is created, noting the actual quantity and condition of the items. Finally, the vendor submits an invoice. The system compares the PO, GR, and invoice for price, quantity, and terms. If all three documents match, the invoice is approved for payment. If there are discrepancies, the invoice is flagged for investigation. This process helps prevent overpayment, duplicate payment, and ensures that the company only pays for goods actually received and agreed upon.