Guide
Two-way and three-way invoice matching, explained with examples
Two-way matching compares an invoice with its order: the same products, quantities and prices. Three-way matching adds a third record that confirms something actually happened — in purchasing, the goods received note; for a seller checking its own customer invoices, the payment received. An invoice is approved when every record agrees, and a comparison that could not be made is never counted as agreeing.
Two-way matching: the invoice against the order
The order is what was agreed. Two-way matching asks whether the invoice bills exactly that: the right customer, an order that exists and is on that customer’s account, every product on the order, the ordered quantities, the agreed unit prices, and a total within an agreed tolerance of what the order says.
It catches overbilling, wrong prices and substitutions. It cannot catch an invoice for goods that were ordered but never delivered or paid for, because the order alone cannot tell you that.
Three-way matching: adding what actually happened
The third record is evidence. A buyer approving a supplier’s invoice uses the goods received note — the invoice, the purchase order and the delivery must agree before paying. A seller checking its own invoices before they go out or are closed uses the payments received: the invoice, the sales order and the money in the bank must agree.
The comparison is the same shape either way. If the invoice says it has been paid in full and only part of the money has arrived, the invoice and the order can agree perfectly and the third record still says no.
Where checafatura’s checks fit
| Records compared | Kind of match | Checks |
|---|---|---|
| Invoice ↔ customer | Before any match | Customer is identified, and certain enough |
| Invoice ↔ order | Two-way | Order exists and is on the customer’s account; products, quantities, unit prices and total agree |
| Invoice ↔ order ↔ payments received | Three-way | Amount paid matches the payments on record |
| Invoice ↔ itself, and every earlier invoice | Neither, and both need it | Adds up, dated sensibly, not a duplicate |
The invoice approval checklist lists every one of these checks with its tolerance and what to do when it fails.
Matching when the identifiers are missing
Matching is easy when the invoice quotes an account number and an order reference. Often it quotes a name and nothing else. checafatura matches an account or tax number exactly, an exact name strongly but not with certainty, and an approximate name as approximate — each with a confidence score and the reason for it. Without an order reference it looks only inside that customer’s own orders, rather than searching every order for one whose total happens to be right. Anything matched on less than an identifier goes to a person.
Why a check that could not run is not a pass
Three-way matching fails quietly when the third record is missing. No payments recorded yet, no delivery note filed: the comparison has nothing to compare, and a process that treats “nothing to compare” as “nothing wrong” approves exactly the invoices it should have stopped.
So every check in checafatura comes back passed, failed or not checked, and not checked is never counted as passed. A required check that could not run sends the invoice to a person, with the reason in words: which check, and what it was missing.
The payment check starts as optional, because many invoices are checked before any money is due: with no payments recorded and none stated on the invoice, it is reported as not checked and the rest of the decision stands on the two-way checks. An administrator who wants three-way matching enforced makes it required, and from then on an invoice with no payment to compare against goes to a person.
Further reading
- Invoice reconciliation CSV starter pack — linked records and two invoices to check.
- Invoice approval checklist: the 15 checks before you approve — Each check in plain words, what it catches and what to do when it fails. Prints on one or two pages.
- Invoice doesn’t match the purchase order: the common discrepancies, and what to do — The five differences between an invoice and its order that come up most, and how to handle each.
- How checafatura decides — the five steps from an invoice arriving to a recommendation.
Run these checks on every invoice, against your own records
An account imports your customers, orders and payments from CSV or Excel, reads PDF invoices, runs every check above with tolerances you set, and keeps each decision in an audit log that cannot be edited.