Three-Way Matching…As easy as 1, 2, 3


Not to be confused with an online dating site or a Triple Threat Match in World Wrestling Federation terms, which is a regular wrestling match but with three competitors instead of two, each one awaiting his turn to be tagged and beaten to a pulp. No, this is Three-Way Matching in the accounting sense of the word.

The term “Three-Way Match” describes the most standard procedure businesses use to process valid invoices received from suppliers. “Three-Way” refers to the 3 documents  involved, which include the Supplier Invoice, Purchase Order and Receiving Report.

“Match” refers to the comparison or cross reference checks between these documents. Order numbers, line items, quantities ordered and quantities received should match 100%. When all the documents have been compared and validated by the three-way match process, the invoice can be forwarded to the Accounts Payable department to be processed for payment. Most companies or businesses will not consider an invoice to be payable until they have a purchase order with a price that matches the price on the invoice, and a Receiving Report from the requisitioner that indicates that the items or services were received in good order.

Three-Way Matching can be time consuming, especially if still done manually, however it helps to identify some of the following mismatches associated the whole procurement process and enables you to come up with ways to rectify them:

  • Product errors in the Purchase Order and on the Receiving Document
  • Product errors on the Supplier Invoice
  • Sudden price changes after the Purchase Order was created
  • Quantity errors on the Purchase Order, Supplier Invoice and Receiving Report
  • Sudden added shipping cost
  • Sudden added surcharges that magically appear
  • Discounts discussed with suppliers were not included

Using the Three-Way Matching method safeguards a company’s assets and enables greater discipline, administration and control. When it comes to purchase orders, it helps to have a dedicated purchase approval system in place to prevent these errors from happening.  is a purchase approval system that contorts to your company’s needs, not the other way around. Book a free demo to find out more.

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