What is three-way matching, and why it matters
Three-way matching checks every vendor bill against the purchase order and the goods receipt before it is paid. Here is how it works.
Every business that buys goods has felt it: a bill arrives, someone pays it, and weeks later it turns out the price was wrong, or half the order never arrived. Three-way matching is the control that stops that happening.
The three documents
A vendor bill is matched against two other records before it can be paid:
| Document | What it proves |
|---|---|
| Purchase order | What you agreed to buy, and at what price |
| Goods receipt | What actually arrived |
| Vendor bill | What the vendor is asking you to pay |
If all three agree – the same items, the same quantities, the same prices – the bill is ready to approve. If they do not, something needs a person's attention before money leaves the business.
What happens when they do not match
The most common mismatches are a price that differs from the order, or a bill for more than was received. A good system does not reject the bill outright. It holds it, shows exactly why, and sends it to someone who can decide.
A held bill is not a failure. It is the system doing its job.
In Cortex Ledger, a bill that does not match the order is held for review, and the reason is shown on the line – for example, the billed price, the order price and the difference.
Why it matters
- You pay for what you received, at the price you agreed.
- Duplicate and inflated bills are caught before payment, not after.
- Your books stay right: goods received but not yet billed are tracked in their own account until the bill arrives.
