What is a Three-Way Matching in Business Central?

A verification process that compares the purchase order, goods receipt, and vendor invoice to ensure accuracy before payment.

Three-Way Matching is an accounts payable control that compares three documents before approving a vendor invoice for payment: the Purchase Order (what was ordered), the Goods Receipt (what was received), and the Purchase Invoice (what the vendor is billing). All three must agree on items, quantities, and prices.

In Business Central, three-way matching is supported through the 'Exact Cost Reversing Mandatory' and quantity/amount validation settings. When an invoice is entered, BC checks that receipt quantities exist for the invoiced amounts and flags discrepancies for review.

This process prevents common AP errors: paying for goods never received, paying more than the agreed price, or paying for quantities that exceed what was ordered. While it adds a step to invoice processing, it significantly reduces overpayments and fraud risk in procurement.

Related terms

• Purchase Order — A formal document sent to a vendor to order goods or services, with agreed quantities, prices, and delivery terms.
• Goods Receipt — The process of recording received items against a purchase order in Business Central, updating inventory and triggering accruals.
• Purchase Invoice — A document recording a vendor's bill for goods or services received, used for accounts payable processing in Business Central.
• Approval Workflow — Business Central's built-in system for routing purchase orders and invoices through configurable approval chains before posting.

How Zentriq helps

Zentriq's AI tools automate many of the manual processes around three-way matching in Business Central. Learn about the Zentriq Agent or try Zentriq PunchOut to see how AI simplifies procurement in BC.