Three-way matching compares all key details of an invoice, including the purchase order (PO)↗, delivery records, and supplier invoice, before any money goes out. This keeps payments aligned with what a company actually ordered and received, preventing incorrect payments from going through. As invoice volumes increase, maintaining that accuracy manually can slow things down. This is why accounts payable↗ (AP) teams seek steadier, automated processes.
This guide looks at how three-way matching works and how Moss streamlines the process for greater efficiency and control.
What three-way matching is and how it works
Three-way matching in accounts payable (AP) looks at the documents that show the full path of a purchase, including:
- PO: The PO number outlines what the company requested. The buyer’s procurement team typically creates it early in the process.
- Goods receipt: A goods receipt confirms the delivery and records when it arrives.
- Supplier invoice: This statement requests payment for the goods or services provided.
A reviewer checks the quantities, unit prices, and item details across the documents. When everything aligns, the invoice moves forward. If there’s a mismatch, the reviewer contacts the vendor or the employee who placed the order to resolve it before approving payment.
Say someone orders 10 laptops. The PO lists the requests, the goods receipt confirms that all the laptops arrived, and the invoice details the charge. If the statement lists 12 laptops instead of 10, the reviewer flags the discrepancy and ensures the company only pays for what it actually ordered.
Bringing all three documents together in one system simplifies the invoice process. Instead of digging through multiple tools or shared inboxes, teams can compare the PO, goods receipt, and invoice side by side. This makes approvals faster and more accurate.
2-way vs. 3-way invoice matching in the accounts payable process
AP teams typically use one of two approaches to check invoices.
- 2-way matching: This compares the purchase order and invoice. It confirms the company agreed to the price and that the vendor billed accordingly. The missing piece is delivery confirmation.
- 3-way invoice matching: In this step, teams add the goods receipt. This gives the reviewer a clear picture of deliveries and makes it easier to identify any differences from the order.
Companies often use two-way matching for smaller suppliers or low-value purchases, while larger or more sensitive purchases benefit from the extra verification. Many teams see three-way matching as a more reliable option when delivery details fluctuate. Accounts payable automation↗ simplifies both approaches by pairing invoices with POs, instantly flagging any discrepancies, and speeding up approvals.
Manual vs. automated three-way matching
Manual invoice review can turn a simple task into a slow, back-and-forth process. Reviewers might need to open old email chains, search for attachments, and compare PDFs by hand. Automation changes this. It reads invoices immediately, pulls in the matching PO, and adds the delivery record. When everything matches, the invoice moves forward for payment approval. If something differs, the system flags it so someone can manually review it.
This approach saves time, reduces repetitive checks, and gives teams an organised view of each purchase. It also increases consistency: Different managers and reviewers see the same information in the same format. This reduces confusion and prevents delays during manual handoffs.
Best practices for implementing three-way matching automation
Finance teams can get the most out of three-way matching by adopting a few key best practices. These steps streamline the AP cycle↗ and let automation deliver maximum efficiency, building on a clear, reliable record:
- Set value thresholds: Set a value threshold for three-way matching, so only higher-dollar invoices undergo the extra review. This helps prevent financial risk from unchecked high-value purchases.
- Integrate Enterprise Resource Planning (ERP) systems↗: Connect your ERP to ensure vendor details, cost centers, and PO data stay consistent across tools and teams.
- Maintain vendor data quality: Keep records up to date to reduce billing errors and prevent delays during matching.
- Standardize POs: Use a consistent format so the system can easily read and compare details.
- Record deliveries: Encourage employees to log receipts quickly, so the system has immediate confirmation of what arrived.
Why three-way matching matters for scaling companies
As organisations grow, more purchases, suppliers, and approvals increase the chance for errors and oversight. Without a consistent review method, it’s difficult to track the items the company received and confirm that the invoice reflects the original request. Three-way matching creates a transparent workflow that scales with your company.
Finance teams rely on this process to strengthen internal controls, ensuring that approvals follow policy and reducing the risk of errors and fraud. Three-way matching also supports compliance, as each matched invoice provides better financial visibility. This gives leaders a clear view of spending patterns and cash flow.
Key benefits of three-way matching and cost effectiveness
Three-way matching cuts down on uncertainty by catching mismatched details early, keeping payments tied to accurate documents. Companies often find it worthwhile because it reduces manual checks and prevents hold-ups. Key benefits include:
- Reduces errors in accounts payable↗ by catching mismatches early
- Speeds approvals and prevents delays
- Cuts down on manual checks and backtracking
- Maintains smooth supplier relationships↗
- Supports scalable, efficient workflows
- Enhances audit readiness and compliance
Companies often find 3-way matching in AP worthwhile because it reduces the amount of manual checks and backtracking. Teams experience fewer hold-ups, prevent mismatches, and maintain a workflow that scales easily as invoice volume grows.
How Moss automates the three-way matching workflow
Moss automatically brings the PO, goods receipt, and invoice into the matching workflow. If something doesn’t match, Moss routes the invoice to the right person. When everything aligns, the invoice moves forward without extra steps.
The platform supports both two-way and three-way matching, giving teams flexibility depending on the purchase. Moss integrates with the full intake-to-pay process so employees never have to switch tools or hunt for documents — everything stays in one system from request to approval.
Bring clarity to the three-way matching process with Moss
Three-way matching gives finance teams a clear view of payments and keeps reviews steady as the company grows. Automating comparisons eliminates repetitive steps, freeing teams to focus on higher-value work. Moss builds on this by matching documents to POs and delivery records, ensuring accuracy and proper routing.
Our AP automation solution↗ reads documents, aligns the details with POs and delivery records, and sends each invoice along the right path. The platform delivers consistency and efficiency across the entire workflow, helping companies manage payments more smoothly.
