What is the primary purpose of three-way matching in procurement processes?

The primary purpose of three-way matching in procurement processes is to compare a purchase order, receipt, and invoice. This matching process serves as a control mechanism to ensure that the items billed by the supplier correspond to the items that were ordered and the items that have been received.

When a purchase order is created, it outlines the expected goods or services, including quantities and pricing. Once the goods are delivered, a receipt is generated to confirm what was actually received. Finally, the supplier sends an invoice requesting payment for the goods provided. By matching these three documents, the organization can verify that it only pays for the goods that were ordered and received, thus preventing discrepancies and ensuring accuracy in the procurement process. This process is essential for maintaining financial control and keeping procurement operations running smoothly.

The other options pertain to important aspects of procurement management, but they do not specifically outline the primary function of three-way matching. Validating supplier contracts and invoices relates to compliance and accuracy in basic agreements and billing but does not encompass the entire matching process. Ensuring quality relates more to supplier performance and product evaluation, while managing supplier relationships concerns overall interaction and collaboration, which go beyond the transactional nature of three-way matching.