Three-way matching: automate supplier invoice, PO and receipt matching

Three-way matching (or 3-way matching) compares three documents before a supplier invoice is paid: the purchase order, the receiving report and the invoice. When the three agree on supplier, quantities and prices, payment can proceed. Automated, this control removes manual data entry and flags discrepancies before they become costly.

What is supplier invoice matching?

Invoice matching means verifying that a supplier invoice corresponds to what was ordered and received, before it is approved and paid. It is a control at the heart of accounts payable: it protects against billing errors, duplicates and unjustified payments. Done by hand, this control is slow and lets discrepancies through. Automated, it becomes fast, consistent and auditable.

Two-way vs three-way matching: what is the difference?

Two-way matching

Two-way matching compares two documents: the purchase order and the invoice. You confirm that the supplier is billing what was ordered, at the right prices and quantities. Fast, it fits services or expenses with no physical goods received.

Three-way matching

Three-way matching adds a third document: the receiving report. You confirm not only what was ordered and billed, but also what was actually delivered. It is the reference control for physical goods, because it prevents paying for merchandise that was never received.

Three-way matching in practice: three documents, one decision

• The purchase order: what you ordered (supplier, items, quantities, agreed prices).
• The receiving report: what you actually received (quantities delivered, date).
• The supplier invoice: what the supplier is claiming (amounts, taxes, payment terms).

When the three documents agree, the invoice continues through its approval workflow. When a discrepancy appears, it is flagged for human review, before payment. This "verify before you pay" logic is what makes three-way matching a safeguard against fraud and overpayment.

Discrepancies automated matching catches

• Quantity billed higher than the quantity actually received.
• Unit price different from the price negotiated on the purchase order.
• Invoice with no matching purchase order.
• Duplicates flagged: same invoice received twice, or a number already processed.
• Inconsistent taxes or payment terms.
• Partial receipt not reflected in the billing.

How Viridem automates three-way matching

Viridem does not replace your judgment: it removes the repetitive work around it.

• Capture: Viridem's hybrid OCR (OCR + AI) extracts the invoice lines (supplier, items, quantities, prices, taxes) in seconds, with no manual entry, at 99% accuracy on critical data.
• Context: the AI contextualizes the information and matches each line against the purchase order and the receiving report. It does not decide for you: your transparent, auditable business rules set the tolerance thresholds and the approval route.
• Integration: Viridem connects to your ERP or accounting software (Acomba, Sage, Dynamics, Genius, SAP Business One and 30+ others) to read purchase orders and write back results, without changing your system.
• Exceptions: discrepancies are flagged, routed to the right person and followed up automatically. Your team focuses on the cases that need judgment, not on re-keying.

Manual matching vs automated with Viridem

Step	Manual matching	With Viridem
Data entry	Line-by-line re-keying	OCR extraction in seconds
Discrepancy detection	By eye, often after the fact	Automatic, before payment
Duplicates	Often slip through	Flagged automatically
Processing time	Days	Minutes
Traceability	Scattered emails	Complete audit trail
Early-payment discounts	Often missed	Captured

The benefits of automated matching

• Up to 80% of administrative tasks handled.
• Return on investment typically seen between 3 and 12 months.
• Fewer errors, fewer duplicates, fewer overpayments.
• Faster month-end close and audits ready in minutes.
• Data hosted in Canada, in the spirit of Quebec's Law 25.

Frequently asked questions