Three Way Match Exception Worksheet
A three way match compares the purchase order, the goods receipt and the vendor invoice. When they disagree beyond tolerance, the invoice blocks and somebody has to work out why. This worksheet gives that somebody a log: it calculates the variances, shows the money in dispute and tracks who owns each exception.
| PO number | Invoice number | Item | PO qty | Received qty | Invoiced qty | PO unit price | Invoice unit price | Qty variance vs receipt | Price variance vs PO | Amount at risk | Root cause | Owner | Status | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
4.2% | 0% | $83 | ||||||||||||
0% | 7.9% | $60 | ||||||||||||
900% | -90% | $0 | ||||||||||||
0% | 0% | $4,725 | ||||||||||||
0% | 0% | $0 |
Amount at risk compares what the vendor billed with what was received at the PO price. A negative value means the invoice is below what you owe for goods received. Received quantity of zero shows 0 percent quantity variance because the percentage cannot be computed, so check those lines by eye.
Automate exception triage from your blocked invoices
We can show how blocked invoices could be classified by cause and routed to the right owner from your ERP data. Optional follow-up.
Optional. The tool and every export work without this. No spam.
How to use the worksheet
Enter one row per blocked invoice line from your ERP's blocked invoice report. Fill in the PO, received and invoiced quantities, and the PO and invoiced unit prices. The worksheet computes the quantity variance against the receipt, the price variance against the PO and the amount at risk. Pick the root cause, an owner and a status. Sort by amount at risk to work the biggest items first, and review the cause mix weekly to find the process fix rather than only clearing the queue.
- Work the largest amount at risk first
- Record the cause every time, not just the fix
- Review aging of open items in the weekly AP meeting
The logic of the match
Quantity is matched to what was received, not what was ordered, because you pay for goods that arrived. Price is matched to the PO or contract price within a tolerance, typically a percentage and an absolute amount, whichever your ERP is configured to use. Amount at risk here is invoiced value minus received quantity at PO price, a simple estimate of the overbilling or timing difference. Your own tolerance rules, for example in SAP or Oracle invoice matching, decide which lines actually block.
Using the cause data
Short receipts point to receiving discipline, price changes to missing contract updates, wrong unit of measure to master data or vendor catalog issues, and not yet received to timing between logistics and billing. Group the log by cause and by vendor monthly. If one vendor produces most unit of measure errors, fix the item master or the vendor's invoice format once, instead of clearing the same exception every month.
- Fix price exceptions at source: update contract or PO price
- Align unit of measure between PO, receipt and vendor invoice
- Escalate chronic vendors with data from this log
Frequently Asked Questions
What is a three way match?
It is the control that compares the purchase order, the goods receipt and the vendor invoice before payment. Quantity must be supported by receipt and price must agree with the order within tolerance. Failures block the invoice for review.
What tolerance should I set?
Many companies use a small percentage plus an absolute amount cap, so tiny differences on low value lines do not block. The right values depend on your spend profile and risk appetite, and are configured in your ERP matching settings.
Why compare quantity to the receipt and not the PO?
You owe payment for what arrived. Invoicing the full PO quantity after a short receipt means you would overpay if the invoice were accepted, so the receipt is the control quantity.
How is a two way match different?
A two way match compares only the PO and the invoice, with no receipt check. It suits services or low risk spend. For inventory and production material, a three way match is the usual control.
If you want exceptions classified and routed automatically from your ERP's blocked invoices, with suggested resolutions for a person to approve, we can build that read-only first and add write-back later.
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Keep exploring
Free tools
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ERP fixes and how-tos
- JD Edwards Three-Way Match: PO Receipt to VoucherReceive a purchase order in P4312 and match the supplier invoice to the receipt in JD Edwards, including price variance, partial receipts and the tables involved.
- How to Receive a PO in Epicor and Run the 3-Way MatchReceive purchase orders in Epicor Kinetic with Receipt Entry, understand the three-way match between PO, receipt and AP invoice, and see where Fulfillment Workbench fits.
- How to Enter an AP Voucher in SyteLineEnter a SyteLine AP voucher against received POs or as a non-PO expense, understand three-way matching and distributions, and fix common voucher problems.
Runs with your ERP
- DocBits and Infor LN: supplier invoice capture and matchingHow DocBits captures supplier invoices, matches them to Infor LN POs and receipts and hands them to LN, with integration notes, setup and pitfalls.
- Esker Accounts Payable with JD Edwards: Invoice Capture and PO MatchingEsker Accounts Payable captures invoices, matches POs and posts to JD Edwards 9.0 and later. Data flows, setup, pitfalls and where a private AI helps.
Guides
- AI Invoice Matching: An Implementation GuideImplement AI invoice matching in your ERP: 2-way and 3-way match automation, exception handling patterns, and how to keep AP control intact under audit.
- Procure-to-Pay Process Optimization for ManufacturersProcure-to-pay process optimization: requisition to payment cycle times, three-way match automation, touchless invoicing, and P2P KPIs for manufacturers.
AI on your ERP
- AI for SAP S/4HANA Procurement (MM) That Reads POs, Receipts and Invoices TogetherAI for SAP S/4HANA procurement: query purchase orders, goods receipts and invoice matching in plain English, on-prem if needed, read-only by default.
- AI for Business Central Purchasing: Questions, Exceptions and Draft Orders on Your Own DataAI for Business Central purchasing: ask plain-English questions on purchase orders, vendor lateness and invoice matching, with read-only access and approvals.
Integrations
- How to add document OCR to SAP S/4HANACapture invoices, packing slips, certificates of conformance and drawings into SAP S/4HANA with OCR, confidence thresholds, 3-way match and human review.
- How to add document OCR to Infor SyteLineCapture vendor invoices, packing slips and certificates of conformance into Infor SyteLine with OCR, confidence thresholds, PO matching and a human review queue.