The three-way match answers a simple question: are we being billed for what we ordered and what we actually received? Accounts payable compares items, quantities and prices across the purchase order (EDI 850), the goods receipt and the invoice (EDI 810). If they agree within set tolerances, the invoice is approved. If not, it goes to review.
There are related variations:
- Two-way match: invoice against purchase order only, often for services
- Three-way match: adds the receiving record
- Four-way match: adds an inspection or quality check
Mismatches are rarely fraud. They come from unit-of-measure differences, partial shipments, price changes that were never recorded on the order, receipts that haven’t been posted, or PDF invoices keyed in by hand. An accurate ASN (EDI 856) helps receiving post the right quantities, and document digitization removes keying errors. Invoices that fail the match delay payment and often turn into claims and deductions.