Three-Way Match: PO, GRN & Invoice Matching
Definition
Three-way match is the check before paying a supplier that the purchase order, the goods receipt note (GRN) and the supplier's invoice agree on item, quantity and rate. Only the quantity actually received and accepted is paid.
| Term | Three-way match |
|---|---|
| In Hindi | त्रि-मार्गी मिलान (थ्री-वे मैच) |
| Area | Purchase & stores |
| Search phrase | three way match |
| Try it | GRN format |
त्रि-मार्गी मिलान (थ्री-वे मैच) — हिंदी में अर्थ
थ्री-वे मैच सप्लायर को भुगतान से पहले की जाँच है कि खरीद आदेश (PO), माल प्राप्ति नोट (GRN) और सप्लायर का बिल आइटम, मात्रा और दर पर मेल खाते हैं। केवल वास्तव में प्राप्त और स्वीकृत मात्रा का ही भुगतान होता है।
What is compared
PO vs invoice: item, rate, discount, tax rate, payment terms. GRN vs invoice: quantity received and accepted after inspection. Any difference outside a set tolerance — say ±2% on quantity for bulk material, nil on rate — puts the invoice on hold until purchase or stores clears it, or a debit note is raised.
Two-way, three-way and four-way
Two-way match compares only PO and invoice — used for services or where no goods are received. Three-way adds the GRN and is the standard for material. Four-way adds the quality inspection report, so rejected quantity is excluded even if it was physically received. Matching also protects input tax credit, because GST can be claimed only on goods actually received.
Example
PO: 1,000 nos at ₹50. GRN: 960 accepted, 40 rejected. Invoice: 1,000 nos, ₹50,000 + 18% GST = ₹59,000. Pay 960 × ₹50 = ₹48,000 + ₹8,640 GST = ₹56,640, and raise a debit note for ₹2,000 + ₹360 GST = ₹2,360.
Related tools and guides
Frequently asked questions
What are the three documents in a three-way match?
The purchase order, the goods receipt note and the supplier's invoice.
Why is three-way matching important?
It stops paying for goods not ordered, not received or billed at the wrong rate — and stops duplicate payments.
What happens when the match fails?
The invoice is held; the difference is resolved with purchase or stores, or a debit note is raised to the supplier.
Is three-way match needed for services?
Usually a two-way match (PO and invoice) plus a service-completion confirmation is used.
Related terms
- Bin cardA bin card is a record kept at each storage bin or rack by the storekeeper, showing the quantity of an item received, issued and in balance after every transaction. It records quantities only, not values.
- FSN analysisFSN analysis classifies inventory items as Fast-moving, Slow-moving or Non-moving according to how often and how much they are issued over a period, so that stores can focus replenishment on fast items and clear the rest.
- InventoryInventory is the stock of goods a business holds to make or sell — raw material, work in progress, finished goods and consumables. In Hindi it is माल सूची or भंडार.
- Lead timeLead time is the time from starting a process to finishing it — for purchase, from placing an order to receiving the goods; for a customer, from their order to delivery.
- MOQ (Minimum Order Quantity)MOQ stands for Minimum Order Quantity — the smallest quantity a supplier will accept in one order for an item, set so that its own setup, packing and freight costs are covered.
- ProcurementProcurement means obtaining the goods and services a business needs — from identifying the need and choosing a supplier to ordering, receiving and paying. In Hindi, procurement means खरीद or प्रापण.