Three-way match for a 20-person company

A three-way match compares three documents before a supplier is paid: the purchase order (what you asked for), the goods receipt (what arrived), and the supplier invoice (what they billed). If the three agree, the invoice is approved. If they do not, it is an exception and somebody looks at it.

It sounds like an enterprise control. In practice it is the cheapest way for a 20-person company to stop overpaying, and it takes less time than reconciling a mailbox.

Why a two-way match is not enough

Matching the invoice to the purchase order proves the price was agreed. It does not prove the goods arrived. A supplier can invoice an order you cancelled, or invoice ten units when eight were delivered, and a two-way match will happily approve both.

Matching the invoice to the receipt alone is worse: you pay whatever was delivered, at whatever price the supplier chose, with no reference to what was ordered.

The three-way match in one table

The four outcomes, and what to do with each

1. All three agree. Approve the invoice and schedule payment. No human judgement needed.
2. Price differs. The invoice is above or below the agreed price. Hold it and ask the buyer. A small difference may be a freight charge or a currency adjustment; a large one may be a different item or a duplicated line.
3. Quantity differs. The invoice bills more than was received. Pay only the received quantity and ask for a credit note, or wait for the rest of the delivery. Do not let the invoice create stock that never arrived.
4. No receipt at all. The invoice is for goods that have not landed. This is either a pre-payment, which is a different accounting treatment, or an error. Do not pay it as a normal invoice.

What a 20-person company should automate first

Do not start by automating the whole procure-to-pay cycle. Start with the exception report. If you can produce, once a week, a list of invoices where the ordered, received and billed quantities differ, you have captured most of the value with a fraction of the work.

Then, in order:

1. Make the purchase order the only way to commit to a supplier.
2. Make the goods receipt reference the purchase order line, not a free-text description.
3. Make the invoice reference the purchase order number, so matching is a lookup and not an investigation.
4. Only then automate the approval and the posting.

A small team can do steps 1–3 in a spreadsheet, if it is disciplined. The reason to move to a platform is that the platform will not forget: the receipt updates the stock and the cost in the same transaction, and the ledger entry follows the document instead of being re-keyed.

The exception that catches most companies

Partial deliveries. A supplier ships 60 of 100 units, invoices all 100, and promises the rest next week. A matching process that only looks at the invoice total marks it matched, because the order says 100 and the invoice says 100. The receipt is the only document that knows the truth.

The rule is simple: the payable is the received value, not the invoiced value. The remainder is an open commitment, not a liability. If your process cannot express that, you are funding your supplier’s working capital.

When not to bother

If you buy from one supplier, on account, with a monthly statement and a long relationship, a full three-way match may cost more than it saves. The threshold is usually a mix of volume and number of suppliers: the more invoices and the more suppliers, the more the exception report pays for itself.

How this works in NXTA

A purchase order, a goods receipt and a supplier invoice are linked records. The match compares values, not screenshots, and the payable follows the receipt. The distributor overview walks the whole chain, and the price list shows what the purchasing meter costs.