What is a three-way match?
A three-way match is the check accounts payable makes before paying a supplier: it compares the purchase order, the receiving record and the invoice, line by line, and pays only what all three agree on. The purchase order records what you agreed to buy and at what price, the receiving record what arrived, and the invoice what the supplier wants paid. For a bookkeeper, this is how you demonstrate that every bill you paid was ordered, delivered and priced as agreed.
- Purchase orderWhat you agreed to buy, and at what price
- Receiving recordWhat was delivered, signed on arrival
- InvoiceWhat the supplier wants paid
- Pay what all three agree on
What do you compare in a three-way match?
You compare each line of the invoice with the corresponding line on the purchase order and on the receiving record, and examine four things.
- The item: the invoice names the same product or service the order asked for.
- The quantity: the number billed is no more than the number received, and the number received is no more than the number ordered.
- The unit price: the price billed is the price on the order, or in the agreement the order points to.
- The arithmetic: each line, the subtotal and the total add up from the quantity and the price.
Most teams also agree a tolerance, a small difference such as a rounding gap of a few cents that they accept without asking, and hold anything outside it until someone explains it.
How is a two-way match different from a three-way match?
A two-way match compares only the invoice and the purchase order, so it confirms the price and quantity were agreed but not that anything arrived. It suits services with nothing to count at a loading dock, such as a repair or a consultant’s hours, where the person who requested the work confirms it was done. For goods, the receiving record is the only document your own team writes at the moment of delivery, which is why a three-way match is the stronger check: it catches the short shipment that a two-way match pays in full.
How does the federal government use the same check?
The US federal government writes the same three-document principle into what its agencies must do before they pay a contractor. Under the Federal Acquisition Regulation, part 32.905, a federal payment is based on a proper invoice and satisfactory performance, and most invoice payments must be supported by a receiving report that records the quantities received and accepted. Those rules bind federal agencies, not private companies, but they show the same three documents doing the same job.
Worked example: a short delivery at Ashcombe
Ashcombe Industrial Supply is an invented company, one of the Demo companies Ressura uses to show its checks, and every figure below is made up for the example. It is a wholesale distributor that orders stock for its Columbus warehouse from a fastener and abrasives supplier.
Purchase order 4417 asks for three lines: 200 boxes of hex bolts at $18.40 a box, 150 cartons of flap discs at $22.75 a carton, and 60 cases of nitrile gloves at $41.20 a case. The receiving record, signed at the warehouse on delivery, shows 200 boxes of bolts, 120 cartons of flap discs and 60 cases of gloves, because the supplier had 30 cartons of discs on back order.
The invoice bills every line in full: $3,680.00 for the bolts, $3,412.50 for the discs and $2,472.00 for the gloves, a total of $9,564.50, and a two-way match approves it, since each quantity and price is exactly what the order states.
The three-way match does not, because although the bolts and gloves agree on all three documents, the flap discs fail: 150 cartons billed, 120 received, so 30 cartons at $22.75 are billed but not yet delivered, which comes to $682.50. Ashcombe pays $8,882.00 now, asks the supplier for a corrected invoice or a credit note, and pays for the last 30 cartons when the receiving record shows they arrived.
What should you do when a line fails?
You hold that line, not the whole invoice, and ask the person who can explain the gap: a quantity gap goes to whoever received the goods, to confirm the count, and then to the supplier, with the order, the receiving record and the invoice side by side. A price gap goes to whoever agreed the price, and the agreement decides who is right; the article on checking supplier invoices against agreed prices shows how to read it. Keep the answer with the invoice, and record a clean match too, because it is the proof you take to your manager that every bill was checked.
How does Ressura help with a three-way match?
Ressura’s Procure-to-Pay Module checks the quantity on every invoice against what you ordered or what you received, whichever you go by, and every unit price against the price your agreement sets for that item on that date. It adds each invoice up again and flags an invoice that repeats another, which a match on its own can miss; finding duplicate payments covers those. Any gap is shown in dollars with the arithmetic beside it, and if every line matches, the result reads All in order and lists exactly what was checked.