3-way matching is one of the most widely used invoice controls in Australian accounts payable teams. It’s also one of the most misunderstood. When applied badly, it slows payments and frustrates teams. When applied well, it reduces invoice errors, prevents overpayment, and improves financial control without creating bottlenecks. If you’re managing invoices in Sydney, Melbourne, Brisbane, Perth, or Adelaide, the principles are the same. The challenge is applying 3-way matching in a way that fits how Australian businesses actually operate.
Why 3-way matching gets a bad reputation in Australian accounts payable
Many Australian AP teams associate 3-way matching with delays.
That usually happens when:
- purchase orders are raised inconsistently
- goods receipting is delayed or skipped
- suppliers invoice before delivery
- partial deliveries are common
- invoice descriptions don’t match PO lines
This is common across construction, manufacturing, healthcare, and education — especially in fast-growing businesses across Melbourne and Sydney.
The control isn’t the problem.
The process around it is.
What is 3-way matching?
3-way matching is a control used in accounts payable to check that three records align before payment is approved.
Those records are:
- The purchase order – what was approved
- The goods receipt or service confirmation – what was received
- The supplier invoice – what is being charged
If all three match within agreed tolerances, the invoice can be approved for payment.
This is a standard practice across Australian finance teams, especially where spend control and audit requirements matter.
Why Australian finance teams still rely on it
At its core, 3-way matching answers one question:
Are we paying the right supplier, the right amount, for something we actually received?
Used properly, it helps Australian businesses:
- prevent duplicate or inflated invoices
- reduce off-contract pricing
- avoid paying for goods not received
- strengthen internal controls
- maintain a clear audit trail
For organisations operating across multiple states — or multiple sites — this control becomes even more important.
Where things start to feel painful
In reality, documents rarely line up perfectly.
Australian AP teams often deal with:
- partial deliveries across multiple sites
- invoices raised before goods arrive
- changes to scope or quantities
- inconsistent PO usage
- suppliers using different item descriptions
Without the right systems in place, matching becomes manual and time-consuming.
That’s when teams start bypassing controls just to keep payments moving.
Common friction points
Most invoice exceptions in Australian businesses come from the same issues:
- missing or late goods receipting
- invoices without PO numbers
- quantity variances
- price differences outside tolerance
- manual receipting processes
- POs raised after the invoice arrives
- supplier data inconsistencies
These issues are common whether you’re processing invoices in Perth or Brisbane.
The shift away from manual matching
Many teams still “do” 3-way matching — but informally.
That often looks like:
- visually checking totals
- emailing operations for confirmation
- chasing PO numbers
- approving invoices based on trust
This works at low volume.
It breaks down as invoice volume grows.
As businesses scale across Australia, informal checks stop being reliable.
How automation changed 3-way matching
Automation turns 3-way matching from a manual task into a defined process.
Instead of chasing paperwork, systems can:
- match invoices to purchase orders automatically
- check receipting status in real time
- apply tolerance rules
- flag genuine exceptions
- approve clean invoices without delay
This allows AP teams in cities like Sydney and Melbourne to process higher volumes without increasing headcount.
From processing volume to exception focus
The goal is not to manually match every invoice.
The goal is to focus attention where risk exists.
Automation allows teams to:
- approve low-risk invoices automatically
- route exceptions to the right person
- prioritise high-value or high-risk spend
- reduce payment delays caused by unnecessary checks
This approach is increasingly common across Australian finance teams looking to modernise AP.
Where AI improves matching accuracy
AI helps where traditional matching struggles.
It can:
- recognise supplier descriptions that don’t exactly match PO lines
- extract data from inconsistent invoice formats
- reduce false exceptions caused by formatting differences
This is particularly useful for Australian businesses dealing with a wide supplier base.
A better way to think about 3-way matching
3-way matching should not be a blanket rule.
It’s a control that should be applied based on:
- invoice value
- supplier risk
- category risk
- operational reality
Service-based invoices, partial deliveries, and ongoing contracts often need a different approach.
The aim is control — not friction.
The takeaway
3-way matching remains one of the most effective AP controls used by Australian businesses.
When applied proportionately and supported by automation, it:
- reduces invoice errors
- prevents overpayment
- improves audit readiness
- keeps suppliers paid on time
The best results come from setting clear rules and managing exceptions — not forcing every invoice through the same process.
Martin is the founder of Zahara and stays hands-on with its product and creative direction. He’s a driving force behind the company’s momentum, with a focus on speed and clarity in both work and life.
TL;DR
3-way matching is a core control used by Australian accounts payable teams to reduce invoice errors and prevent overpayment. When applied correctly, it helps finance teams stay in control without slowing down supplier payments.
- 3-way matching checks the purchase order, goods receipt, and supplier invoice before approval.
- It is widely used across Australian businesses to reduce incorrect payments and strengthen audit controls.
- Manual matching creates delays, especially as invoice volumes grow.
- Automation allows compliant invoices to be approved automatically while exceptions are reviewed.
- A risk-based approach gives finance teams control without adding friction to the AP process.
FAQs
Quick answers to the questions we hear most often — so you can find what you need fast, avoid the jargon, and move on with confidence.
Yes. AP automation software can automatically match invoices to POs and receipts, route exceptions to the right approver, and maintain a full audit trail. This reduces manual invoice checking and helps finance teams process invoices faster.
2-way matching compares the PO and invoice only, while 3-way matching also checks the goods receipt (or service confirmation). Australian finance teams typically use 3-way matching when receipts are required and control is more important than speed.
AI helps by recognising patterns in supplier billing, predicting which exceptions are genuine risks, and reducing time spent on low-value checks. It can also improve accuracy when reading invoices and coding line items, making matching faster than manual AP workflows.
For partial deliveries, the invoice should be matched to the portion of goods actually received. Many Australian AP teams use tolerance rules or partial receipt matching so invoices can be processed without manual back-and-forth, while still maintaining control.
3-way matching is best for higher-risk spend such as inventory, equipment, large supplier invoices, and repeat purchases where delivery confirmation matters. It’s especially useful for businesses with multiple approvers, high invoice volume, or strict audit requirements.
3-way matching creates a clear audit trail showing that an invoice was validated against the PO and receipt before payment. This strengthens internal controls, supports financial compliance, and reduces the risk of duplicate or incorrect supplier payments.
