Definition
Three-way match is an accounts payable control that checks a supplier invoice against the purchase order and the goods receipt before the invoice is approved for payment.
What is three-way match used for?
The PO confirms what was agreed, the receipt confirms what arrived and the invoice says what the supplier wants paid. If quantities or prices differ by more than a set tolerance, the invoice is held for review. This stops a business paying for goods it never received or at prices it never agreed.
An invoice that fails the match
Example- Purchase order
- 100 units at USD 50
- Goods receipt
- 96 units
- Supplier invoice
- 100 units at USD 52
Result
Held
Two-way match skips the receipt; four-way match adds an inspection step. The checks happen before the purchase invoice is approved.