A three-way match compares three documents before you pay a supplier: the purchase order (what you ordered, at what price), the goods received notes (what arrived and was accepted) and the supplier’s invoice (what you are asked to pay). This guide follows one order through two deliveries and one invoice, using the purchase order and goods received note editors.
The rule
Check every line of the invoice twice:
- Quantity: the invoiced quantity should equal the accepted quantity on your goods received notes. Not the ordered quantity, and not what came off the truck.
- Price: the invoiced unit price should equal the unit price on your purchase order.
Anything else on the invoice, such as a charge or an item that is not on the order, needs an explanation before you pay it. What the documents support is accepted quantity × order price for each line. The difference between that and the invoice total is what you ask the supplier about.
The example order
Names and figures are invented.
Copperleaf Bakery orders packaging from Northgate Packaging on purchase order PO-0231. No tax is shown on the order (rate 0), so the figures stay simple.
| Item code | Description | Qty | Unit price | Amount |
|---|---|---|---|---|
| CB12 | Cake box, 12 in, case of 100 | 8 | 38.50 | 308.00 |
| BAGS | Paper bag, small, case of 500 | 4 | 21.40 | 85.60 |
| CUP8 | Paper cup, 8 oz, case of 1,000 | 3 | 54.90 | 164.70 |
| LID8 | Lid for 8 oz cup, case of 1,000 | 3 | 27.80 | 83.40 |
Total = 308.00 + 85.60 + 164.70 + 83.40 = 641.70.
Step 1: Record each delivery on a goods received note
The first delivery has one crushed case of cake boxes and no lids. Open PO-0231 and choose Create goods received note: the four lines come over with their ordered quantities, and Received before is 0 on a first note. Count what arrived under Received now and the crushed case under Damaged.
Delivery 1
| Item code | Ordered | Received now | Damaged | Accepted | Outstanding | Status |
|---|---|---|---|---|---|---|
| CB12 | 8 | 5 | 1 | 4 | 4 | Short |
| BAGS | 4 | 4 | 0 | 4 | 0 | Complete |
| CUP8 | 3 | 3 | 0 | 3 | 0 | Complete |
| LID8 | 3 | 0 | 0 | 0 | 3 | Pending |
A week later the remaining cake boxes arrive, but only 2 of the 3 cases of lids. On the first note, choose Create next goods received note: each line’s accepted quantity moves into Received before, and Received now is pre-filled with what is still outstanding. Change the lids from 3 to 2. Nothing is damaged this time.
Delivery 2
| Item code | Ordered | Received before | Received now | Accepted | Outstanding | Status |
|---|---|---|---|---|---|---|
| CB12 | 8 | 4 | 4 | 4 | 0 | Complete |
| BAGS | 4 | 4 | 0 | 0 | 0 | Complete |
| CUP8 | 3 | 3 | 0 | 0 | 0 | Complete |
| LID8 | 3 | 0 | 2 | 2 | 1 | Short |
You do not need to add the two notes together. On the latest one, Ordered − Outstanding is everything accepted so far: 8 − 0 = 8 cases of cake boxes, 4 of bags, 3 of cups and 3 − 1 = 2 of lids.
Step 2: Put the supplier’s invoice next to them
Northgate’s invoice quotes PO-0231 and asks for 661.20:
| Item code | Qty | Unit price | Amount |
|---|---|---|---|
| CB12 | 8 | 38.50 | 308.00 |
| BAGS | 4 | 21.40 | 85.60 |
| CUP8 | 3 | 56.40 | 169.20 |
| LID8 | 3 | 27.80 | 83.40 |
| Delivery charge | 1 | 15.00 | 15.00 |
Step 3: Compare line by line
| Item code | Accepted | Invoiced | Order price | Invoice price | Result |
|---|---|---|---|---|---|
| CB12 | 8 | 8 | 38.50 | 38.50 | Matches |
| BAGS | 4 | 4 | 21.40 | 21.40 | Matches |
| CUP8 | 3 | 3 | 54.90 | 56.40 | 1.50 a case too high |
| LID8 | 2 | 3 | 27.80 | 27.80 | 1 case not received |
| Delivery charge | – | 1 | – | 15.00 | Not ordered |
Step 4: Work out what the documents support
Accepted quantity × order price, line by line:
- CB12: 8 × 38.50 = 308.00
- BAGS: 4 × 21.40 = 85.60
- CUP8: 3 × 54.90 = 164.70
- LID8: 2 × 27.80 = 55.60
- Supported = 308.00 + 85.60 + 164.70 + 55.60 = 613.90
The invoice asks for 661.20, so 661.20 − 613.90 = 47.30 needs an answer. It is made of exactly three items: 3 × (56.40 − 54.90) = 4.50 for the cup price, 27.80 for the case of lids that has not arrived, and 15.00 for the delivery charge. 4.50 + 27.80 + 15.00 = 47.30, so nothing else on the invoice is unexplained.
Step 5: Ask, settle, then pay
- Send one message with all three points. Quote the order number, the supplier’s invoice number and your goods received note numbers, so the supplier can find everything.
- The missing case of lids. The second note still shows 1 outstanding. Either it is delivered, and the next goods received note makes the line match, or the supplier credits it.
- The cup price. If you agreed to a new price, in a later quote or an email, open the purchase order, choose New version under More actions and enter that price, so your order and the invoice say the same. If you did not agree to it, ask for a corrected invoice or a credit note.
- The delivery charge. If the order or your agreement covers delivery, there is nothing to ask. If neither mentions it, ask what it is for.
- Pay what is settled. Whether you pay the 613.90 now and the rest once it is cleared, or wait for a corrected invoice, is for you and the supplier to agree. Ask before you pay less than an invoice says.
If the invoice arrives before the last delivery
Match against the notes you have on the day you check, and check again after the next delivery. Had this invoice arrived after the first delivery, only 4 cases of cake boxes and no lids would have been accepted. The documents would then support 4 × 38.50 + 85.60 + 164.70 = 404.30, and the remaining cake boxes and lids would wait for the second note.
Common mistakes
- Comparing the invoice with the order only. The order and the invoice both say 3 cases of lids. Only the goods received notes show that 2 arrived.
- Counting what arrived instead of what was accepted. The crushed case of cake boxes came off the truck but was not accepted. Accepted = Received now − Damaged − Rejected, and damaged units stay outstanding until they are replaced.
- Looking at the first note only. With delivery 1 alone, the correct invoice line for 8 cases of cake boxes looks like an overcharge of 4 cases. Use the latest note.
- Comparing prices in different units. An invoice for 800 cake boxes at 0.385 each and an order for 8 cases of 100 at 38.50 both come to 308.00. Convert to one unit before you call it a price difference.
- Changing the goods received note to make the numbers agree. The note records what arrived. Fix the order with a new version, or ask the supplier for a corrected invoice, but leave the receiving record as it was counted.
What the editors do and do not do
- The purchase order keeps the prices; the goods received note keeps the quantities, with no price columns.
- Each new goods received note continues from the one before it, so keep the notes saved on this device or in a backup file (how saving works).
- Nothing here reads a supplier’s invoice or matches it for you, and nothing is sent to the supplier.
- The supplier’s side of an order sent in several parts is in Partial shipments. See all purchasing documents.