How Costpoint Two-Way Match Works
The process begins with an approved purchase order containing information such as the vendor, item or service description, quantity, unit price, and purchasing terms. When the supplier invoice arrives, relevant invoice fields are compared with the purchase-order data.
A successful match indicates that the invoice is associated with the expected supplier and purchase order and that the billed information agrees with the authorized purchasing data. If configured tolerances are exceeded, the invoice can be routed for review before approval.
2 Way Matching applies this invoice-to-purchase-order comparison directly, making it useful when receipt information is not required for the applicable transaction category.
Key Components of Two-Way Matching
Two-way matching focuses on the relationship between purchasing authorization and supplier billing. The purchase order establishes what was authorized, while the invoice establishes what the supplier is requesting for payment.
- Supplier: Confirms that the invoice belongs to the vendor associated with the purchasing transaction.
- Purchase order: Provides the authorized items, services, quantities, prices, and terms used for comparison.
- Invoice: Supplies the billed quantities, prices, totals, invoice number, and other payment information.
- Matching rules: Define which invoice and purchase-order fields must agree and which differences can fall within approved tolerances.
The distinction between matching methods is covered in Master AP Matching: 2-Way, 3-Way & No-Match Explained, which explains how two-way, three-way, and no-match approaches can be applied to different AP scenarios.
Two-Way Match Versus Three-Way Match
The primary difference is the evidence used for validation. Two-way matching compares the invoice with the purchase order, while three-way matching also considers a receiving record to verify that the goods or services were received.
The broader Three Way Match concept is therefore relevant when receiving information is required before an invoice can proceed. Similarly, Three Way Match Procurement connects the matching method to procurement workflows where purchase orders, receipts, and supplier invoices need to be reconciled.
Two-way matching may be appropriate for services, subscriptions, recurring charges, or other transactions where a separate receiving event is not the primary control evidence. The matching approach should follow the organization's purchasing policies and transaction characteristics.
Configuration and Exception Handling
Matching rules can be tailored to the types of invoices being processed. Matching Startegy Configuration supports configuring two-way, three-way, or no-match approaches according to factors such as vendor or expense category, allowing workflows to align with established internal rules.
An exception may occur when the invoice price differs from the purchase-order price, the billed quantity exceeds the quantity authorized, the supplier does not correspond to the purchase order, or required purchasing information is missing. Reviewers can examine the source documents and determine whether the difference requires correction, additional approval, or another authorized resolution.
An Exact Match occurs when the relevant comparison values agree precisely according to the applicable matching criteria. Tolerance-based matching can accommodate permitted differences when organizational policy allows them.
Role in Procurement and AP Controls
Two-way matching works within the wider procure-to-pay process. Requisitions establish purchasing needs, purchase orders document authorized commitments, and invoices initiate the request for payment. Understanding the purchase order and invoice relationship helps finance teams determine which purchasing information should be available when an invoice enters AP.
Procurement controls can also incorporate 3-way match where receiving evidence is necessary. This creates a distinction between transactions that require purchase-order-and-invoice validation and those that require additional confirmation of receipt.
Vendor controls provide another supporting layer. Vendor On Boarding can use two-way or three-way comparisons of W-9 forms, contracts, and system records, while Vendor Identity Verification can compare vendor documentation and other information to establish reliable supplier records.
Automation and Invoice Processing
Automation can coordinate invoice capture, data extraction, purchase-order comparison, validation, exception routing, approval, and posting. With structured workflows, matching can occur consistently as invoices move through accounts payable.
Invoice validation also depends on accurate accounting information. After relevant invoice fields are extracted and validated, appropriate chart of accounts information can support GL coding and subsequent posting. Automated matching can therefore become part of a broader workflow that connects invoice data with accounting controls.
Where transaction policies call for a different matching approach, organizations can configure the applicable rules rather than applying the same method to every invoice category. This supports consistent processing while preserving appropriate controls for different purchasing scenarios.
Summary
Costpoint Two-Way Match compares supplier invoices with purchase orders to validate billing against authorized purchasing information. It is useful when receiving records are not required as part of the invoice-control process. By applying appropriate matching rules, tolerances, vendor controls, and approval workflows, organizations can strengthen AP accuracy, procurement visibility, financial reporting, and payment authorization.