Why it matters for builders
- Variations arrive as separate claims. A claim that includes variation work with no approved variation order is the most common way a job goes over budget.
- Retention is held back on each claim. If the retention line is wrong, you pay out money you were meant to hold until practical completion.
For builders in Dynamics 365 Finance
- Raise the order from the job. Go to Project management and accounting > Projects > All projects, choose Manage > Item task > Purchase order. On the line open the Project tab and check the cost and sales prices.
- Subcontractors often send several progress claims against one order line. Set Match price totals on Accounts payable parameters. It compares the net amount of each invoice line, plus pending and posted invoices, with the order line, by percentage or amount or both.
- Use Allow matching policy override to apply a different policy to a vendor, an item or a single order line. Services and materials can then follow different rules.
- For goods received before the bill: tick Post product receipts to ledger on Accounts payable parameters. For procurement categories tick Accrue purchase expense on receipt on the Category policy rule page. The accrued cost shows in project reports before the invoice arrives.
What Dynamics 365 Finance does on its own
Invoice totals, 2-way, 3-way and charges matching with tolerances.
Matching can be set for the legal entity and overridden on the item and the order line.
What you need and the setup steps: PO matching for Dynamics 365 Finance.
Example
Example Concreting Pty Ltd holds a subcontract purchase order of $80,000 ex GST for slab works on project 214. Claims 1 and 2 already total $55,000 ex GST. Claim 3 arrives for $30,000 ex GST.
| Line | Amount | What the check finds |
|---|---|---|
| Claim 3 slab pour, level 2 | $30,000.00 | Claim brings the total to $85,000, which is $5,000 over the order |
| Retention held at 5% | -$1,500.00 | Matches the retention rate on the order, so this line is fine |
Claims to date now pass the order value by $5,000. The claim goes to the project manager to confirm a signed variation before it is approved.
Common mistakes
- Matching each claim to the full order value instead of the balance left after earlier claims.
- Paying a variation line because the work was done on site, with no signed variation order behind it.
Step-by-step guides for Dynamics 365 Finance
- How to match a vendor invoice to a purchase order in Dynamics 365 Finance
- How to handle a partial delivery against a purchase order in Dynamics 365 Finance
- How to set a price tolerance on purchase order matching in Dynamics 365 Finance
What Pulsify adds
Pulsify matches each bill line to a purchase order line and flags extra quantity, a different price or lines not on the purchase order. Pulsify connects to Dynamics 365 Finance. We set up the connection for you. More about PO matching in Pulsify or Pulsify for builders.
More help
- PO matching in IFS Cloud for builders
- PO matching in MYOB Acumatica for builders
- PO matching in Sage 300 CRE for builders
- Invoice approvals in Dynamics 365 Finance for builders
- Line item coding in Dynamics 365 Finance for builders
- Invoice fraud checks in Dynamics 365 Finance for builders
- Duplicate invoice checks in Dynamics 365 Finance for builders
- All Dynamics 365 Finance how-to guides
Sources
Last checked 2026-10-19.
- learn.microsoft.com/en-us/dynamics365/finance/accounts-payable/accounts-payable-invoice-matching
- learn.microsoft.com/en-us/dynamics365/finance/accounts-payable/tasks/set-up-accounts-payable-invoice-matching-validation
- learn.microsoft.com/en-us/dynamics365/supply-chain/procurement/tasks/create-project-purchase-order
- learn.microsoft.com/en-us/dynamics365/finance/accounts-payable/project-cost-accrual-purchase-receipts
- www.nsw.gov.au/housing-and-construction/compliance-and-regulation/security-of-payment/responding-to-a-payment-claim
- www.qld.gov.au/securityofpayment
Also confirmed by
Common questions
How does Dynamics 365 Finance match progress claims to a project purchase order?
Turn on price totals matching. It adds up pending and posted invoices for each order line and compares the total net amount with the order line within your percentage or amount tolerance. This suits suppliers who bill one order line in several claims.
What happens if the claim is more than the order?
Hold it until the project manager confirms a signed variation. Security of payment laws set short deadlines to respond to a claim, so raise the difference quickly and give written reasons if you pay less.
Does Finance support 2-way and 3-way match?
Yes. The matching policy is Invoice totals, 2-way or 3-way and charges matching. 3-way compares the invoice with the order and the posted product receipt. You can override the policy per item or order line.
Pulsify setup guides
Want this done for you?
Book a call to see how Pulsify handles PO matching in Dynamics 365 Finance for builders.