Answer
What is three-way matching and do you need it?
Updated July 2026 · by the DynamoDocs team
The short answer
Three-way matching checks an invoice against the purchase order that authorised it and against the receipt proving the goods arrived. Two-way matching only compares the invoice to the PO, which passes an invoice for a delivery that never came. DynamoDocs does either, as a setting, and can take the receipt from packing slips or from your ERP's own receiving records.
What the third leg adds
A two-way match answers 'does this invoice agree with what we ordered?'. It cannot answer the question accounts payable actually gets burned by: 'did the goods ever turn up?'. A supplier can invoice exactly what the PO says for a pallet that was never delivered, or bill the full order when half of it backordered, and a PO-only check passes both.
Where the receipt comes from
You do not have to start capturing packing slips. Most ERPs already record a receiving transaction against the PO, and DynamoDocs can read receipts from there instead, because asking a team to re-key data they already own is not automation. It can also use both sources together.
Only a shortfall is an exception
Being billed for more than arrived is a problem. Receiving more than was billed is a warehouse question, so it does not hold up the invoice.
When the units do not agree
Twenty cases billed against 240 eaches received is a question your item master answers. DynamoDocs reports the unit mismatch for a person to settle instead of producing a confident wrong number.
Why it is off by default
Turning on three-way matching before receipts are being captured flags every invoice as 'nothing received' and buries the real exceptions on day one. It is a deliberate switch you throw once receipts are flowing.
Related questions
Do we need to capture packing slips?
Only if you want to. If your ERP records goods receipts against the PO, DynamoDocs can read them from there.
Does an advance ship notice count as a receipt?
Not unless you say so. An ASN states what the supplier intends to ship; it is no evidence the goods arrived, so treating it as a receipt would let a supplier's own promise satisfy the check meant to verify it. It is a separate setting.
What about tolerances?
Amount, price and quantity tolerances are configurable, so rounding and agreed variances do not create noise.
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