“3-Way Match” refers to the automated reconciliation of three procurement documents: Purchase Order (PO), Goods Receipt/Service Entry (GR/SES), and Supplier Invoice. The objective is to validate quantities, prices, and terms, surface discrepancies, and release only approved invoices for payment.
PO–GR–Invoice reconciliation: Automatic line-level matching by item/service, quantity, price, tax, and currency.
Tolerances & thresholds: Configurable over-/under-quantity and price tolerances by supplier, category, or contract.
Exception handling & workflows: Rule-based routing and escalation for mismatches (e.g., price variance > 5%).
Invoice blocking & approval: Automatic payment blocks for exceptions and multi-level approvals.
Partial and many-to-many matching: Supports partial receipts, consolidated invoicing, and residual quantities.
Service entry matching (SES): 3-way match for services using approved time/effort confirmations.
Tax & surcharges validation: Check VAT, discounts, freight, and ancillary charges against PO terms.
OCR & e-invoicing intake: Structured capture from PDF/OCR and e-invoice formats (e.g., UBL/Peppol) with PO association.
Duplicate detection & fraud checks: Identify duplicate invoices and validate master data (bank details, VAT IDs).
Variance accounting & KPIs: Post price/quantity variances, monitor First-Pass-Yield and cycle times.
GR/IR clearing: Automated reconciliation of goods-received/invoice-received balances and period-end accruals.
Contract & catalog integration: Use framework agreements, catalog prices, and tiers during matching.
Configurable matching logic: Sequence of checks, fuzzy item matching, unit conversions.
Audit trail & compliance: Full traceability of checks, approvals, and changes.
A manufacturer orders 1,000 screws at €0.10 each. GR is 1,000 units; invoice is 1,000 units at €0.10—the invoice is auto-approved and paid.
The supplier invoices 1,050 units while GR is 1,000—the invoice is auto-blocked and routed to purchasing for resolution.
For a services PO, the approved SES confirms 40 hours; the invoice shows 45 hours, exceeding tolerance and triggering review.
Multiple partial receipts (3×200, 1×400) are matched to a single consolidated invoice for 1,000 units; quantities align and approval proceeds.
The invoice price is 2% above the contract price; the variance is posted and sent through the approval matrix.