3-Way PO Matching Best Practices | 2 minute read

Matching Process

When a bill enters the invoice process flow, the system determines whether or not the bill is to be sent for PO matching.  3-way PO matching is the process of matching bills, purchase orders, and inventory receipts. 

3-way PO matching is mostly used by companies that track inventory and want to validate quantities purchased, units of measure, and unit pricing against those ordered.

3-Way Matching Protocols

  • Payees set for 3-way PO matching will match the PO and Item Receipt to a Bill.
  • Payees’ bills must be matched at the line level.
  • Items will be checked to see if they have the same quantity, units, price (per unit), and amount.
  • You can also approve a line on the Bill that is not on the PO by selecting ‘Approve non-PO line.’

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Who Uses PO Matching?

Users with the Approval Management, Non-PO Line Approver, and Process Bills permission have access to the PO matching process.

The table below indicates what each of these roles allow users to do. 

User Role

Action

Approval Management
  • Allows the user to:
      • Approve bills on behalf of the designated approver
      • Retract approved bills
      • Manually route bills for PO matching
      • Send bills for approval without PO matching

Non-PO Line Approver
  • Enables the user to approve or unapprove non-PO bill lines
  • This role only applies to PO matching

Process Bills 
  • Allows the user to:
      • Add bills
      • Review and update bills, and define bill approvers
      • Process bills manually
      • Send reminders to approvers and payees
      • Cancel bill approval requests and payee approval/ invoice requests
      • Delete or dispute (and undo delete, undo dispute) bills
      • Prepare bill payments
      • Mark bills as paid manually
      • Mark/ unmark bills as "Hold payment"
      • Link bills with purchase orders
      • Reconcile PO matching exceptions
      • Allocate bill amounts to PO lines

 

Exception Thresholds 

With short-shipments or overshipments scenarios, the line quantity may not match the original bill amount. Thresholds can be used to set tolerances (exceptions) to a perfect match which require the following:

  • If bills match perfectly, they will either be immediately sent to Pending Payment or assigned to a bill approver - depending on what is set on the instance.
  • If bills do not match perfectly, but they are within the tolerances you set, they will be able to be approved by a bill approver.
  • If bills are outside of your tolerances, or have a hard exception such as incorrect unit type or currency type, the bill cannot be approved.

Exception Field

Threshold Type

 Threshold Value

Bill Amount

Percentage

10%

Line Amount

Percentage

10%

Line Price

Percentage

10%

Line Quantity

Percentage

10%