Three-way match

Checking that the purchase order, goods receipt, and vendor invoice agree on quantity and price before you approve payment.

Also searched as: PO GRN invoice match, 3-way matching, accounts payable matching, invoice verification

Two-way match compares the invoice to the PO. Three-way match also requires a goods (or service) receipt so you do not pay for what never arrived. The match is the control; the ERP is only useful if it surfaces variances instead of burying them.

Typical tolerances catch pennies and rounding. Material price or quantity gaps should block payment until someone owns the exception — wrong PO, partial delivery, or a vendor overbilling.

If you buy almost nothing on POs, three-way match is ceremony. It matters when purchase volume, fraud risk, or audit expectations make “pay what was ordered and received” a real control.

Invoice over PO price

PO: 100 units at $10.00 = $1,000. Warehouse received 100 units. Vendor invoice is $1,050.

  1. PO value = 100 × $10 = $1,000.
  2. Receipt quantity = 100 (matches PO qty).
  3. Invoice value = $1,050.
  4. Price variance = $1,050 − $1,000 = $50 (5%).

Quantity matches; price does not. A strict three-way match holds the $50 until AP accepts the variance or the vendor revises the invoice.

Related modules

Related terms

FAQ

Is service spend still three-way?

Often two-way (PO + invoice) with an approval standing in for receipt. Goods usually need the warehouse receipt as the third leg.