Two-way or three-way match before paying a supplier

When checking a supplier invoice against the order is enough, when to also check what was received, and how to set a rule for each kind of purchase.

By Achekam · 11 October 2026 · 4 min read · For Running a business businesses in South Africa, Nigeria, Kenya

Before a supplier is paid, someone should ask whether the invoice is right. The question is how much checking "right" requires. Comparing the invoice with the order you placed is quick, and catches a supplier charging the wrong price. Comparing it also with what actually came through the door takes longer, and catches a supplier charging for goods that never arrived. Which you need depends on what you are buying.

Most small businesses never decide this deliberately. They either check everything against everything, which slows payments and annoys suppliers, or check nothing at all, which pays for short deliveries without anyone noticing. A short, written rule per kind of purchase is better than either.

What a two-way match checks, and what it misses

A two-way match compares two documents: the purchase order and the supplier's invoice. It answers two questions. Did we order this? Is the price what we agreed?

AccountingTools warns that because a two-way match does not look at receiving documents, it risks paying for an incorrectly billed quantity. A supplier who invoices the full consignment you ordered but delivers only part of it passes a two-way match, because the invoice agrees with the order. The shortfall is only found if someone checks what arrived.

Its advantage, AccountingTools notes, is somewhat faster processing. That is a real advantage when the purchase is low-risk.

Adding the goods-received record: the three-way match

AccountingTools explains that a three-way match compares three documents, the supplier invoice, the purchase order and the receiving report, to confirm that a payment should be made. It adds that matching the invoice to the receiving documents checks that the goods were received, in the correct quantity and in good condition.

The third document changes who is involved. The person receiving goods, at the stores, the site or the back door of the restaurant, becomes part of the payment control. Their record of what was counted and accepted is what the invoice is held against.

That record is only worth matching against if it reflects a real count. The person signing for goods should count before signing, note damage or wrong items on the delivery note there and then, and record only what actually arrived. A receiving record copied from the supplier's own delivery note, rather than from a count, quietly turns a three-way match back into a two-way one with an extra signature on it.

Purchases where a two-way match may be enough

AccountingTools suggests ways to keep three-way matching efficient: excluding small-value and recurring invoices, letting payables staff approve invoices whose prices and units are within a few percent of the order, or moving some purchases onto procurement cards. In practice, a two-way match, or a simpler approval, often suits:

• Recurring services with no physical delivery: cleaning, security, software subscriptions, rent. Nothing is "received" in the stores sense; the check is whether the service was provided, which the person who uses it can confirm.
• Small, frequent purchases where the cost of checking exceeds the risk.
• Fixed contract instalments where the amount is set by the agreement.

A three-way match earns its cost where the risk is in quantity or condition:

• stock and raw materials;
• building materials delivered to site;
• equipment and spares;
• any supplier with a history of short or damaged deliveries.

How Achekam holds an invoice that does not match

Achekam's procurement follows the three-way approach for orders. A purchase order is raised from the selected quotation of an approved requisition, and the person who raised it cannot approve it. Deliveries are recorded against the order line by line, including part deliveries, and a goods-received record is kept.

When a supplier invoice is recorded against the order, it is matched with what was ordered and what arrived. If the price or the quantity differ, it is held until someone writes a resolution note explaining what was decided. Once matched, posting puts it in the ledger as expense, input VAT and trade payables, and the supplier's invoice number stops it being posted twice.

One limit to know: goods received against a purchase order do not add stock. The goods-received record serves the match; stock quantities are kept up to date separately.

Bills that arrive without a purchase order

Not everything starts with an order. The electricity bill, the courier's monthly account and the plumber called out in an emergency all arrive as bills with nothing to match. In Achekam, a business records supplier bills line by line with VAT, and a bill without a purchase order waits for approval before it posts. The approval stands in for the match: someone with authority confirms the cost was genuine before it enters the books. Bills without a purchase order looks at this in more detail.

Deciding the rule for each kind of purchase

Write the rule down in a table your team can follow:

Review the table once a year, and move a supplier up to three-way if its deliveries cause problems. For how a builder handles the receiving step, see recording site deliveries.

Next step

AccountingTools' article on three-way matching explains how accounts payable compares the invoice, order and receiving report before paying. Sort last month's supplier invoices into the categories above, and see which ones were paid without the check your new rule would require.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.