The Procurement Glossary » Three-Way Matching
Three-Way Matching
Procure-to-Pay
Definition
An invoice-control check comparing the purchase order, the goods-receipt record and the supplier invoice before payment.
Explanation
If the PO, receipt and invoice agree on quantity and price, the invoice clears for payment automatically; discrepancies are held for review. Three-way matching is a core defence against overbilling, duplicate payment and fraud.
Example
The invoice for 24 chairs is held because the GRN shows only 22 were received.
Related terms
- Two-Way Matching — An invoice check comparing only the purchase order and the invoice, used where a goods receipt is not applicable (e.g. services).
- Goods Receipt (GRN) — The record confirming that ordered goods have arrived, capturing quantity and condition against the purchase order.
- Purchase Order (PO) — A buyer's official document authorising a purchase from a supplier, stating items, quantities, prices and terms; once accepted it forms a contract.
- Invoice — A supplier's bill requesting payment for goods or services delivered, itemising what was supplied and the amount due.
Related concepts
- Procure-to-Pay (P2P) — The end-to-end operational buying cycle — from requisition and approval to purchase order, receipt, invoice matching and payment.
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Frequently Asked Questions
What is Three-Way Matching?
An invoice-control check comparing the purchase order, the goods-receipt record and the supplier invoice before payment. If the PO, receipt and invoice agree on quantity and price, the invoice clears for payment automatically; discrepancies are held for review. Three-way matching is a core defence against overbilling, duplicate payment and fraud.
Can you give an example of Three-Way Matching?
The invoice for 24 chairs is held because the GRN shows only 22 were received.
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