Step 01
Bill captured with PO reference
Bill OCR captures PO reference from the invoice. The PO surfaces; the matching engine queues the bill.
Procurement Software | 3-Way Matching
PO + GRN + Invoice matched at the line. 97% auto-match. Variance triage built in.
Every B2B bill matched to its PO and GRN at the line level. Configurable tolerance per line. Exact matches release for payment without intervention. Variances surface as a triage queue with the three documents side by side.
How most teams do 3-way match today
3-way match: the manual chase that holds up payments.
A vendor bill arrives. Before payment can release, it has to match a PO and a GRN. The current pattern in most teams:
- AP team opens the bill, the PO and the GRN in three tabs. Eyeballs the match. Misses fractional quantity differences.
- GRN was posted in Tally; PO was raised in a procurement spreadsheet. The two don't talk to each other. Manual cross-reference.
- Variance discovered. AP team emails procurement. Procurement emails the warehouse. Warehouse pulls the photo from a folder. Two days lost.
- Bill payment delayed. Vendor follows up. Relationship damaged for a ₹2,000 quantity mismatch.
The 3-way match is a control, not a chore. But the tooling makes it a chore at scale.
How it works
From bill capture to auto-released payment.
Step 02
Match runs at the line
Each invoice line matches against the PO line and the GRN line on quantity, rate and amount. Tolerance configurable per line (rupee, qty, %).
Step 03
Status classified
Full match (within tolerance), partial match, missing-GRN, missing-PO. Each status has its own resolution path.
Step 04
Variances surface for triage
Variance queue surfaces oldest first. PO line, GRN line and Invoice line shown side by side with photo evidence from the GRN.
Step 05
Exact matches release
Bills with full match (within tolerance) release for payment without manual intervention. Payment scheduler picks them up on the next run.
What the system does
Capability, input, output.
| Capability | Input | Output |
|---|---|---|
| Match engine | Bill line + PO line + GRN line | Match status with tolerance |
| Tolerance config | Rupee, qty, % per category | Auto-clear within / hold above |
| Variance queue | Held bills | Triage queue with PO/GRN/Invoice side-by-side |
| Photo evidence | GRN photos | Surfaced at variance triage |
| Auto-release | Full-match bills | Payment scheduler queue entry |
| Match rate analytics | Historical match data | Rate per vendor, category, period |
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Match engine
- Input
- Bill line + PO line + GRN line
- Output
- Match status with tolerance
-
Tolerance config
- Input
- Rupee, qty, % per category
- Output
- Auto-clear within / hold above
-
Variance queue
- Input
- Held bills
- Output
- Triage queue with PO/GRN/Invoice side-by-side
-
Photo evidence
- Input
- GRN photos
- Output
- Surfaced at variance triage
-
Auto-release
- Input
- Full-match bills
- Output
- Payment scheduler queue entry
-
Match rate analytics
- Input
- Historical match data
- Output
- Rate per vendor, category, period
Compliance + integrations
3-way match as internal control.
The 3-way match is the procurement-to-payment control. Section 134(5) of the Companies Act requires it. Rule 11(g) requires the audit trail. Both built in.
Regulations we work within
-
Section 134(5), Companies Act
Internal financial controls supported with 3-way match evidence.
-
Rule 11(g), Companies Act
Match decision audit trail.
-
Section 16, CGST Act
GRN-confirmed receipt is a Section 16 ITC condition.
Connects to
- Tally Prime PO + GRN + bill sync
- SAP Business One Native connector
3-Way Matching FAQ
What buyers ask.
What tolerance should we set?
Default tolerance is ₹1 absolute and 0.5% relative on amount, with quantity tolerance of 1 unit. Strategic high-volume vendors get tighter (₹1, 0.1%); long-tail vendors get looser (₹10, 1%). Configurable per category and per vendor. Defaults are seeded from Indian audit practice.
A vendor short-shipped 2% but invoiced for full. What happens?
The match flags a quantity variance (received < ordered). The bill holds; the variance triage surfaces the PO line, the GRN line and the invoice line. The AP team contacts the vendor for a credit note for the under-supplied quantity. The bill releases for the received amount.
No PO, just an invoice. How is that handled?
A bill without a PO is flagged as "missing-PO". Configurable per category (some categories like utilities don't use POs). For PO-required categories, the bill holds with a "create retroactive PO or reject" action.
How does the auto-match rate scale?
Mature procurement teams typically reach 95-97% auto-match. The remaining 3-5% is genuine variance (short ships, price revisions, partial delivery) that needs human judgement. The triage queue keeps that small.
More in Procurement Software
Related features
Goods Receipt Notes (GRN)
Mobile-first GRN against the PO. Partial receipts, quality holds, rejection workflows.
See Goods Receipt Notes (GRN)Purchase Orders
Multi-line, multi-currency, multi-location POs with budget checks and approver routing.
See Purchase OrdersBudget Controls
Per cost-centre, per project, per period budgets enforced at PO creation.
See Budget Controls
Run last quarter's bills through the 3-way match.
Connect one entity, free. Upload last quarter's POs, GRNs and bills. The auto-match rate, the variance queue and the payment release path show up before any sales call.