Purchasing & suppliers
Three-Way Match
By the Supply Chain Manager team · Updated October 16, 2026
Three-way match is the accounts-payable check that a supplier invoice agrees with both the purchase order and the goods receipt before it is paid.
The PO says what was ordered and at what price. The goods receipt says what actually arrived. The invoice says what the supplier is billing. If all three agree within tolerance, the invoice is paid; if not, it is held for review.
Tolerances are normally set as a percentage or an amount, so tiny rounding differences do not stop payment. Matches that fail usually go to purchasing to resolve with the supplier. Tracking which suppliers fail most often is a useful extra input into supplier performance reviews.
Three-way match example
Illustrative numbers: PO for 500 units at $4.00. Receipt shows 480 units. Invoice bills 500 at $4.20. The match fails on both quantity and price, so the invoice is held, saving $164 that would otherwise be overpaid (500 × $4.20 − 480 × $4.00).
Why three-way match matters for distributors
Short shipments and price creep are common and easy to miss at volume. Three-way match catches them before payment rather than months later.
Common three-way match mistakes
- Setting tolerances so wide that real discrepancies pass.
- Receiving goods without recording quantities, which makes the match impossible.
Examples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.