Glossary · also called 3-way match, Three way matching, PO-GRN-invoice match
What is a Three-Way Match in Accounts Payable?
Three-way match: A three-way match is a purchase control that compares three documents before a supplier is paid: the purchase order (what was ordered and at what price), the goods receipt note (what was actually received and accepted) and the supplier's invoice (what is being billed). Payment is approved only when quantities and prices agree, within any set tolerance.
Definition
Paying a supplier’s invoice simply because it arrived invites overpayment: billing for goods that were short, damaged or never ordered, or at a higher price than agreed. A three-way match stops that by checking the invoice against two independent records — the purchase order raised by purchase and the GRN raised by stores.
A two-way match (PO and invoice only) checks price but not receipt. A three-way match adds the question “did we actually get this?”
How it works
An example, with illustrative numbers only:
| Item | PO | GRN (accepted) | Invoice | Result |
|---|---|---|---|---|
| Contactor 32 A — qty | 40 | 36 | 40 | Quantity mismatch |
| Contactor 32 A — rate | ₹1,850 | — | ₹1,850 | Price OK |
| Cable 4 sqmm — qty | 500 m | 500 m | 500 m | OK |
| Cable 4 sqmm — rate | ₹62/m | — | ₹65/m | Price mismatch |
Here the invoice should be held: the supplier has billed for 4 contactors that were short or rejected, and the cable rate is higher than the PO. Purchase resolves the differences — a corrected invoice, a debit note or an approved price change — before accounts pays.
Why it matters
- Stops overpayment for short, damaged or unordered goods.
- Enforces agreed prices.
- Separates duties between purchase, stores and accounts, so no single person can order, receive and pay.
- Creates an audit trail that explains every supplier payment.
- Protects input tax credit. Claiming GST credit on an invoice for goods not received creates problems later in GSTR-3B reconciliation; check specifics with your tax advisor.
The match only works if the earlier steps — a purchase requisition, an approved PO and a counted GRN — are done properly.
In Zaptiz
Zaptiz Electrical matches supplier invoices across PO, GRN and invoice before payment, and the Invoice & Delivery Reader agent can read a supplier invoice, match the PO and draft the GRN for review. The supplier invoice three-way match is not part of Zaptiz Construction.