Three-way matching (3-way matching) is the accounts payable process of verifying that a supplier invoice matches the corresponding purchase order (PO) and goods receipt (GR) before the payment is released. It is the primary control against fraudulent or erroneous invoices.
The three documents:
| Document | Created by | Contains |
|---|---|---|
| Purchase Order | Buyer | Agreed quantities, prices, delivery terms |
| Goods Receipt | Warehouse / receiving | Actual quantities received and accepted |
| Invoice | Supplier | Billed quantities, prices, payment terms |
Structured e-invoices (UBL, CII) facilitate automated 3-way matching because they carry the PO number (OrderReference), line-item identifiers (GTIN, seller's item ID), and quantities in machine-readable fields — enabling ERP systems to match without manual intervention.
Key facts
- Also called: 3-way match, PO matching
- Tolerance thresholds: many ERPs allow ±1–2% price variance before flagging
- Enabled by: structured e-invoice fields
OrderReference,ItemID,InvoicedQuantity - Reduces: duplicate payments, overpayments, and invoice fraud
- Contrast with 2-way matching (PO vs invoice only, no GR check)