Three-way match
A three-way match compares an invoice with its purchase order and goods receipt before the invoice is paid.
It confirms that what was ordered, what was received, and what was billed agree. It is a strong payment control, but it does not test whether the purchase order itself reflects the current contract.
Worked example
A PO for 50 units at $120 was raised at an old price, 50 units were received, and the invoice is for $6,000. A contract amendment had already reduced the price to $110.
PO, receipt, and invoice all agree, so the match passes
Overpayment against the amended contract: 50 units × ($120 − $110) = $500
The invoice is approved and paid even though it breaks the contract.
Illustrative example with sample figures.
How it shows up in finance and procurement
Accounts payable teams run three-way matches daily, usually through AP automation. Errors it cannot see tend to surface later, if at all, during a supplier review or audit.
Where AllCaps fits
AllCaps adds the check a three-way match does not make, by testing invoices against the contract, amendments, and rate cards. AllCaps vs AP automation