3-Way PO Matching

Match vendor invoices to internal or external purchase orders and goods receipts. Our Cascading PO Matching engine automatically matches hundreds of lines – saving you both time and money.


What is PO matching?

So what is PO matching exactly?

PO matching (purchase order matching) refers to the process of comparing information on an invoice with documents such as the purchase order, goods receipts and contracts. Its goal is to assure that the vendor payments are accurate and ensure correct accounting of costs. PO matching enables compliance to purchasing contracts and allows for easy detection of fraudulent invoices.

It’s a key activity for a company’s accounts payable team that is rather complex, time consuming and resource intensive -performed manually. Automated PO matching can save your accounts payable department a lot of time and effort with touchless invoice processing.

“Palette’s purchase order matching effectively connects a purchase order with an invoice, and it’s easy to establish rules for variances.”

Rene Faurskov, Finance Manager • Sportmaster

What is 3-way PO matching?

There are three different levels of PO matching: 2-way, 3-way and 4-way. These levels refer to how many supporting documents the invoice is matched against:

  • 2-way matching verifies the invoice against its corresponding PO
  • 3-way matching verifies the invoice against its corresponding PO and goods receipt
  • 4-way matching verifies the invoice against its corresponding PO, goods receipt and acceptance or inspection document

3-way PO matching is the most common. To enable 3-way automated PO matching, a company needs to ensure that master data (vendor ledgers, PO detail and goods receipts) can synchronize seamlessly between their ERP system and AP automation software.


Properties of Palette’s automated PO matching software

  • 3-way PO matching
  • Matches internal or external purchase orders
  • Match at the header or line level
  • Match POs and invoices with hundreds of lines
  • Exceptions are sent to approvers to validate with one-click approval on mobile or desktop
  • Provides a complete audit trail, including messages

Why should you use automated PO matching?

With Palette’s PO matching software you can match POs, invoices and goods receipts efficiently, saving both time and money. If an invoice matches a purchase order, it assumes the coding and approval from the order and can be sent directly to your ERP for payment – without manual handling.

With business rules, a procedure is implemented for invoices that do not match, and acceptable deviation levels are built into the business rules. Exceptions are routed to designated approvers in the approval workflow.

  • Matching of incoming invoices and purchase orders is done at the header level or line level
  • Matching can also be made to order numbers or delivery numbers and amounts
  • An invoice can contain items from several purchase orders, and a purchase order can be matched to several different invoices, whether they are fully or only partially delivered.

How does Palette’s automated PO matching work?

The matching process for all of these documents is automated by our PO matching software when it compares the data and, according to tolerances and rules you set, matches the documents accordingly.

  • For Non-PO invoices or where there is missing information, the invoice is sent to an approver
  • For purchase order invoices that contain exceptions as a result of the matching process, these invoices and all corresponding documents are sent to the appropriate person based on the roles you assign
  • Once delivered, the recipient views the package of information which includes an invoice image, a copy of the PO, the goods receipt information, and a description of the error

Intelligent 3 Way PO Matching is a module in our AP Automation and Purchase to Pay software suites.

Trusted by Banks in the US, Europe & Australia. Full security and compliance accreditations in the US including HIPAA, SOC 1, SOC 2, ISO 27001, GDPR, and PEPPOL.

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