The three records answer different questions
The purchase order shows what was approved. The receiving record shows what actually arrived or was accepted. The invoice shows what the vendor wants to be paid.
Comparing all three helps catch overbilling, duplicate quantities, price changes, incomplete delivery, and invoices for items the company never approved.
Define matching tolerances
A small freight or tax difference may not deserve manual escalation, while a quantity or unit-price change could be material. Set tolerances by category and amount so the control focuses on real exceptions.
Do not force employees to override every harmless rounding difference.
Route exceptions to the business owner
Accounts payable should not guess whether a short shipment is acceptable or a scope change was authorized. Send the exception to the person who ordered or received the item and keep the approval with the invoice.
Once resolved, update the PO or receiving record when needed so the system reflects the final agreement.
Use the control selectively
Three-way matching is strongest for inventory, equipment, and structured procurement. Service invoices may use contracts, time approvals, milestones, or other acceptance evidence instead.
The principle is consistent: payment should connect to both authorization and evidence of delivery.
Questions buyers usually ask
What are the three documents in a three-way match?
The purchase order, the receiving or acceptance record, and the vendor invoice.
Does three-way matching work for services?
It can, but service businesses often replace a receiving document with approved hours, project milestones, deliverable acceptance, or another form of service confirmation.
Check provider facts at the source.
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