The three documents
| Document | Created by | Confirms |
|---|---|---|
| Purchase order | Purchasing | What was ordered, quantity, price, terms |
| Goods receipt note | Stores | What arrived, quantity and condition |
| Vendor bill | Vendor, recorded by accounts | What the vendor is charging |
The routine
- Accounts records the bill against its purchase order.
- The system or reviewer compares quantity and price with the PO and GRN.
- Within tolerance: bill proceeds for approval and payment.
- Outside tolerance: bill is held and the buyer or stores resolves it.
- Exceptions are reviewed weekly by the finance head.
Why it matters
Without it, companies pay for short deliveries, rejected goods and price increases nobody agreed, and duplicate bills slip through. It is one of the first controls auditors test in procure-to-pay.
Frequently asked questions
What is the difference between two-way and three-way match?
Two-way match compares the bill with the purchase order only. Three-way match adds the goods receipt, so you also confirm the goods arrived. Services often use two-way match with a service confirmation instead of a goods receipt.
What tolerance should we allow?
A small percentage or fixed amount for price and quantity differences, set by the finance head. The right figure depends on the size of the business and the goods bought. Anything outside tolerance goes on hold.
Can Zoho do three-way match?
Yes. We set up three-way match in Zoho Books, Zoho Spend (including Zoho Procurement) and Zoho ERP, configuring the documents, approvals and tolerances so bills are checked against the purchase order and the goods receipt before payment.
General information only, not legal, tax or software licensing advice. Zoho features, editions and prices change, so confirm the current position with Zoho or with our team before you commit. See our disclaimer.
