Two-Way Matching

Two-Way Matching is a financial control process that compares purchase orders with vendor invoices before approving payment. This verification ensures that the organization pays only for items it ordered at the agreed-upon prices, quantities, and terms.

The two documents compared in this process are:

• Purchase Order (PO): The buyer's formal order document specifying items, quantities, and prices
• Supplier Invoice: The seller's bill requesting payment for goods or services provided

While simpler than three-way matching, this approach lacks verification that goods were actually received. It's typically used for services where no physical receipt occurs or for low-value, low-risk transactions where the administrative cost of three-way matching exceeds the potential risk of overpayment.

Automated procurement systems perform two-way matching electronically, flagging discrepancies for review while automatically processing matched invoices to accelerate payment cycles and capture prompt payment discounts.