Three-way matching compares a supplier invoice with the agreed purchase order and the receiving record before approval to pay. It helps identify quantity, price and receipt discrepancies. It is a control process, not a promise that an invoice is correct whenever three numbers happen to agree.
The three records
| Record | What it establishes |
|---|---|
| Purchase order and accepted changes | The items, quantities, prices and terms agreed with the supplier |
| Goods received note | What was delivered, accepted, rejected or left unresolved |
| Supplier invoice | What the supplier requests payment for |
Keep original and revised order values distinguishable. A supplier's proposed price change is not automatically an approved revision. The receiving record should also preserve who recorded the receipt and when.
Two-way matching compares the order with the invoice. Some workflows add an inspection or service-acceptance record as a fourth control. Whether that is required depends on the purchase and approved process; services can need acceptance evidence even when there is nothing to count at a dock.
A partial-receipt example
Assume an agreed order for 100 units at $12 each. The first delivery contains 80 accepted units, and the remaining 20 are still expected. The supplier invoices all 100 units for $1,200.
Order commitment = 100 × $12 = $1,200
Accepted first receipt = 80 × $12 = $960
Invoice quantity above receipt = 20 units
Amount requiring review = 20 × $12 = $240