A three-way match is an accounts payable control that compares three documents before an invoice is paid: the purchase order (what was ordered), the receiving record or proof of delivery (what actually arrived), and the supplier invoice (what is being billed). Payment is released only when all three agree, within a set tolerance.
Some companies add a fourth document, an inspection or quality report, and call it a four-way match.
Why it matters
It stops the company from paying for goods that were never ordered, never delivered, or delivered short. It also catches price drift, where the invoice carries a higher price than the one agreed on the PO.
Example
A PO orders 200 safety vests at $12 each, $2,400 in total (illustrative). The receiving record shows 180 vests arrived. The invoice bills for 200. Accounts payable either pays $2,160 for the 180 received or holds the invoice until the rest arrives, as the company's policy says.
Common pitfalls
- Receiving not recorded on time. Invoices sit unmatched, payment terms expire, and early payment discounts are lost.
- Partial deliveries handled by hand with no record of what is still outstanding.
- Overrides without a reason. Someone forces a mismatched invoice through, and nobody can later say why.
- Services squeezed into a goods process. For services, the "receipt" should be the requester confirming the work was done.