3-Way Matching
The process of matching a vendor invoice to the corresponding purchase order and receiving document before approving payment.
Definition
Three-way matching is an accounts payable control that verifies a vendor invoice by comparing it against three documents: the purchase order (what was ordered), the receiving document or goods receipt (what was delivered), and the invoice (what is being billed). This process helps prevent overpayment, fraud, and errors.
Why It Matters
Without 3-way matching, companies risk paying for goods never received, overpaying due to invoice errors, or paying incorrect prices. It's a fundamental control for AP accuracy and fraud prevention.
Examples
Standard match
PO for 100 units at $10/unit, receipt for 100 units, invoice for $1,000 - all match, approved for payment.
Quantity variance
PO for 100 units, receipt for 95 units, invoice for 100 units - exception for 5-unit discrepancy.
Price variance
PO at $10/unit, invoice at $11/unit - price exception requires review before payment.
How Nexus AP Helps
Nexus AP performs intelligent 3-way matching automatically, handling partial receipts, price tolerances, and unit of measure conversions. AI resolves common exceptions without human intervention.
Start Free TrialFrequently Asked Questions
What is the difference between 2-way and 3-way matching?
2-way matching compares only the PO and invoice. 3-way matching adds the receiving document to verify goods were actually received before paying.
Can you automate 3-way matching?
Yes, AP automation software like Nexus AP can automatically perform 3-way matching, flagging only genuine exceptions for human review.
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Deep Dive Guides
three way matching
Product capability and workflow fit.
What Is Three-Way Matching in Accounts Payable? A Complete Guide
Three-way matching compares purchase orders, invoices, and goods receipts to prevent overpayments and fraud. Learn how it works, when to use 2-way vs. 3-way vs. 4-way matching, and how to automate the process.
3-Way Matching
Automatically match invoices to POs and receipts. Resolve discrepancies before they become problems.
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