Why Matching Matters in Accounts Payable
Invoice matching is the backbone of an efficient accounts payable automation process. At its core, it verifies that organizations are only paying for what was ordered—and received—eliminating costly errors such as duplicate payments, unauthorized purchases, and procurement fraud.
As finance teams look to do more with fewer resources in 2025, streamlining the invoice matching process can reduce manual work, improve audit readiness, and support broader digital transformation goals. Whether you use 2-way or 3-way matching should depend on your procurement model, industry compliance needs, and your ability to scale through automation.
For deeper context, see SoftCo’s breakdown of how to prevent duplicate payments in AP.
What is a 2-Way Match?
2-way matching involves comparing two key documents:
- The purchase order (PO)
- The supplier invoice
If pricing, quantity, and payment terms match between the PO and the invoice, payment is approved. This approach is best suited for digital services, software licenses, and recurring contracts where delivery isn’t tied to physical goods.
Benefits:
- Faster processing and fewer touchpoints
- Ideal for services-based companies or SaaS purchases
- Reduces complexity for low-risk transactions
Limitations:
- Does not confirm whether goods or services were delivered
- Higher risk of overpayment, fraud, or unintentional errors
This matching method can be effectively automated using modern AP automation software to balance speed with baseline control.
What is a 3-Way Match?
3-way matching adds another verification point to confirm physical receipt of goods. It compares:
- The purchase order
- The goods receipt note (GRN)
- The supplier invoice
The invoice is paid only when all three match, ensuring goods or services were received as intended.
Benefits:
- Robust fraud prevention and financial control
- Ensures inventory accuracy and delivery confirmation
- Supports full auditability for internal and external compliance
Limitations:
- Requires input from procurement, finance, and receiving teams
- Without p2p automation and invoice management software, it can delay processing
Explore how 3-way match is fully integrated into SoftCo’s procure to pay solution.
Why 3-Way Matching Is the New Standard in 2025
Organizations worldwide are prioritizing tighter financial controls, especially in response to rising procurement fraud, ESG reporting obligations, and increased audit scrutiny. One of the key shifts has been the adoption of 3-way matching as a central control mechanism.
According to a 2024 industry analysis by AIMultiple, companies are increasingly automating 3-way matching to strengthen risk management and reduce manual intervention. The report highlights that as invoice volumes scale, manual verification becomes a bottleneck—leading to delayed payments, increased exceptions, and higher risk exposure.
In addition, PwC’s fraud risk management insights emphasize the importance of layered verification—including invoice-to-PO and receipt matching—as a safeguard against billing errors and fraud.
With intelligent accounts payable automation solutions like SoftCoAP, even high-volume finance teams can achieve touchless 3-way match at scale—maintaining control without adding complexity.
Use Case Scenarios: When to Choose 2-Way vs. 3-Way Match
Choosing the right strategy depends on what you’re buying and how critical risk mitigation is.
Use 2-Way Matching When:
- You purchase SaaS, licenses, or professional services
- No physical delivery or stock is involved
- Agility and speed outweigh the need for verification
Use 3-Way Matching When:
- You’re purchasing raw materials, inventory, or physical assets
- Your industry has strict audit, ESG, or regulatory compliance requirements
- Fraud prevention and delivery confirmation are non-negotiable
Organizations that implement dynamic matching logic using AP automation tools can configure workflows that adapt based on supplier type, spend threshold, or contract category.
Real-World Case Studies of 3-Way Match Success
JJ Foodservice
- Industry: Food & Beverage
- Volume: 100,000 invoices annually
- ERP: Microsoft Dynamics AX
- Impact:
- 80% straight-through processing using automated 3-way match
- Exception handling reduced manual involvement significantly
Logitech
- Industry: Manufacturing
- Challenge: Lack of transparency in manual matching
- Solution: AI-powered invoice-to-receipt matching
- Result: 83% touchless processing and full audit trail visibility
Chanelle Pharma
- Previous process: Manual 2-way matching
- Upgrade: Adopted SoftCo’s AI-based smart and 3-way matching
- Result: Improved compliance and complete audit-readiness
Technology Trends: Why Automation is the Enabler
Manual matching methods—particularly 3-way—are resource-intensive. But when automated with intelligent workflows, this process becomes a control layer that operates at scale, even in complex procurement environments.
SoftCo’s platform enables:
- End-to-end visibility across POs, receipts, and invoices
- AI-based exception detection and resolution
- Integration with all major ERPs (SAP, Oracle, NetSuite, Dynamics)
Gartner’s 2025 outlook on invoice automation and procurement integration highlights automation as a top priority for CFOs seeking to improve working capital and fraud controls.
Conclusion: 3-Way Matching is No Longer Optional
Invoice matching isn’t just an operational detail—it’s a strategic necessity. As global regulations tighten and fraud risk rises, 3-way matching—enabled by AP automation software—has become the gold standard.
Companies that automate this process unlock:
- Faster cycle times
- Fewer errors and exceptions
- Higher confidence in financial reporting
Explore how SoftCo’s accounts payable automation transforms invoice matching into a strategic advantage—or book a free consultation with our AP experts.
