A purchase order records what the buyer asked the supplier to provide. A delivery note describes what the supplier shipped; the invoice states what the supplier wants to be paid. Three-way matching brings these records together before an invoice is posted or approved. The difficult work starts when quantities, item codes or prices disagree.
This guide focuses on line-item review. For an overview of the accounts payable process and its owners, start with the introductory guide.
What each document proves
| Document | Data to compare | Limitation |
|---|---|---|
| Purchase order | Supplier, item, quantity, unit and agreed price | It may be amended or fulfilled in several deliveries |
| Delivery note | Items and quantities declared as shipped | Shipped quantity is distinct from quantity accepted on receipt |
| Supplier invoice | Items, quantities and prices billed | One invoice may cover several delivery notes or part of an order |
A delivery note helps link a shipment to the purchase order. To confirm what was actually received, use the warehouse goods receipt or other acceptance record. The presence of a delivery note alone does not prove that the invoice is correct.
How to match line items
- Link the documents: identify supplier and purchase-order references, even when their formats differ.
- Normalize items: compare supplier item codes with internal codes using a verified mapping.
- Align units: convert packs, pieces or kilograms using approved rules while retaining the original value.
- Combine receipts: handle multiple delivery notes and partial deliveries against one PO line.
- Compare the invoice: check quantity and price against the order and accepted goods; show the exact difference.
- Assign the exception: route it to procurement, receiving or finance and record the decision.
Controls should reflect the purchase type. A service with no delivery note, for example, requires confirmation of service completion rather than a goods receipt.
Partial delivery example
Illustrative example, not a customer case: a PO requests 100 units at €10 each. The delivery note and receipt confirm 80 units, while the invoice bills 100. The unit price matches, but 20 billed units have not been recorded as received. Hold the invoice for review: a second delivery note or warehouse entry may be missing, or the supplier may need to correct the invoice. The system should not choose among these explanations without evidence.
For multiple deliveries, compare cumulative accepted quantity and quantity already invoiced. This avoids treating each delivery note as a separate order or approving one line twice.
Common exceptions
- Missing PO or wrong reference: find the correct order before linking lines.
- Different item codes: verify the supplier-to-internal mapping rather than matching on description alone.
- Different units: make the conversion factor and its approval visible.
- Partial delivery or return: compare received and accepted quantities, not just shipped quantities.
- Price or discount difference: compare against the valid version of the order.
- Possible duplicate: check invoice identifiers and previously posted lines.
Any quantity or price tolerance must be approved by the business for the relevant purchase category and supplier. Differences within tolerance should remain visible and traceable.
What to automate and what to review
Document capture, field extraction, proposed matches and discrepancy alerts can reduce manual comparison. Commercial disputes, contested receipts and accounting decisions still need the person responsible for them. Keep each result linked to its source line and document so a reviewer can see why it was held.
TypeLens helps capture and understand business documents. Explore its delivery-note workflow and supplier-invoice workflow. In a demo, use your own samples to check which fields, matches and controls can be configured for your ERP.
How to measure the process
- share of lines matched to PO and receipt without correction;
- exceptions by cause, supplier and resolution time;
- invoices waiting for a delivery note or receipt confirmation;
- adjustments after posting;
- time from invoice receipt to approval.
Start with real documents, including partial deliveries and difficult scans. Measure the complete workflow, including review time, rather than extraction accuracy alone.