PO-to-Invoice Matching Checker
Enter your purchase order and invoice line items side by side. Flag quantity and price discrepancies in seconds. No sign-up needed.
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What is 2-way matching in accounts payable?
Two-way matching is the process of comparing a purchase order against its corresponding invoice to verify that the quantities, prices, and totals align before payment is authorised. The AP team checks that what was ordered matches what was billed. If the two documents agree, the invoice is approved for payment. If they disagree, the invoice is flagged for review.
This is the most common form of purchase order matching and serves as a basic control against paying for goods or services that were never ordered, or paying more than the agreed price. For businesses processing hundreds of invoices each month, automated 2-way matching eliminates the manual comparison that otherwise consumes hours of AP time. The check is straightforward: does the invoice line up with the PO? If yes, pay it. If not, investigate.
2-way vs 3-way matching
The difference between 2-way and 3-way matching comes down to one additional document: the goods receipt note (also called a delivery docket or receiving report). Here is how the two approaches compare:
| Check | 2-Way Match | 3-Way Match |
|---|---|---|
| PO vs Invoice | Yes | Yes |
| Goods Receipt vs Invoice | No | Yes |
| When to use | Services, subscriptions, recurring charges | Physical goods, inventory, high-value materials |
Three-way matching adds a physical verification step. The warehouse or site team confirms what was actually received, and the AP team compares that against both the PO and the invoice. This catches situations where a supplier invoices for 100 units but only delivered 90, or where the wrong product was shipped entirely. For distribution and wholesale businesses handling physical stock, 3-way matching is essential. For services where there is no physical delivery, 2-way matching is the standard approach and avoids creating unnecessary paperwork.
Common PO matching discrepancies and how to resolve them
Even well-run AP teams encounter discrepancies. The key is having a clear process for each type so that exceptions are resolved quickly rather than sitting in a queue for weeks.
Quantity variance
The invoice shows a different quantity than the PO. This usually means a partial delivery occurred. Check the goods receipt note to confirm how many units actually arrived. If the delivery was genuinely short, pay for what was received and follow up with the supplier on the balance. If the full quantity arrived but the invoice is wrong, send it back for correction.
Price variance
The unit price on the invoice does not match the PO. This happens when a supplier increases prices but the PO was not updated, or when a contract rate expired. If the price increase is legitimate and agreed, update the PO to reflect the new rate and approve the invoice. If it was not agreed, reject the invoice and request a corrected version at the contracted price.
Missing PO lines
The invoice includes line items that do not appear on the PO. This could be additional items ordered informally (by phone or email without updating the PO), delivery charges, or items that belong on a different PO. Use a purchase order generator to create proper POs for any items ordered outside the original scope.
PO not found
The invoice references a PO number that does not exist in your system, or no PO number was provided at all. Route these invoices to an exception handling queue. The approving manager should either locate the correct PO, create a retrospective PO if the spend was legitimate, or reject the invoice entirely. A high volume of non-PO invoices signals a procurement compliance problem that needs addressing at the source.
Worked example
A wholesale distributor raises an 8-line purchase order for $47,200 covering mixed building materials. When the invoice arrives for $46,850, the AP team runs it through the matching checker. Six lines match exactly. Two lines show discrepancies:
| Line item | PO | Invoice | Status | Variance |
|---|---|---|---|---|
| Cement bags 20kg | 200 x $18.00 | 180 x $18.00 | Qty variance | -$360.00 |
| Timber battens 42x19mm | 50 x $24.50 | 50 x $24.70 | Price variance | +$10.00 |
| 6 other lines | Exact match | Matched | $0.00 | |
| Net variance | -$350.00 | |||
The net variance is -$350 in the buyer's favour. The cement under-delivery accounts for -$360 (200 ordered, 180 invoiced at $18 each). The timber price increase adds +$10 (50 units at $24.70 instead of $24.50). The remaining six lines total correctly. The AP team flags this for review: the cement shortfall needs a goods receipt check to confirm only 180 bags arrived, and the timber price increase needs sign-off from the procurement manager before the invoice is approved.
Implementing PO matching in your AP workflows catches these discrepancies before payment rather than after, saving the business from overpaying or paying for undelivered goods.
Frequently asked questions
What percentage of invoices should match on first pass?
Best-in-class AP teams achieve a first-pass match rate of 80-90%. This means 8 or 9 out of every 10 invoices match the corresponding purchase order without manual intervention. If your rate sits below 70%, your purchasing process likely has gaps in how POs are raised, priced, or communicated to suppliers. Improving PO accuracy at the point of creation is the fastest way to lift your match rate.
What tolerance should I set for price variances?
Most organisations set a price tolerance between 1% and 5%, depending on the category. For raw materials with volatile pricing, a 5% tolerance avoids constant exceptions. For contracted services or fixed-rate supplies, 1-2% is standard. Some teams also set a dollar threshold (e.g. $50) so that low-value invoices do not trigger exceptions over a few cents of rounding difference.
Do I need 3-way matching or is 2-way enough?
Two-way matching (PO vs invoice) is sufficient for services, subscriptions, and recurring charges where there is no physical delivery to verify. Three-way matching adds the goods receipt note and is essential for physical goods, especially high-value inventory. If your business handles both, apply 3-way matching to goods and 2-way to services to balance control with processing speed.
What happens when an invoice has no matching PO?
An invoice without a matching PO is called a non-PO invoice or maverick spend. It should be routed to an exception queue where a manager reviews and either creates a retrospective PO, approves the spend as an exception, or rejects the invoice. High volumes of non-PO invoices indicate a procurement discipline problem that needs addressing at the departmental level.
How does PO matching prevent fraud?
PO matching is a key internal control because it requires independent verification at each stage. A fraudulent invoice without a legitimate PO will fail the match. Inflated quantities or prices trigger variance flags automatically. Three-way matching adds a physical verification layer through the goods receipt, making it harder for someone to approve payment for goods never delivered. Segregation of duties between PO creation, goods receipt, and invoice approval strengthens this control further.
See how Pulsify automates AP →Stop matching invoices manually
Pulsify matches POs to invoices automatically, flags discrepancies, and routes exceptions to the right approver. Your AP team stops spending hours on line-by-line comparisons.