Match purchase orders, delivery notes and invoices

Three records. The purchase order records what was agreed. The goods receipt records what the business has confirmed receiving. The invoice records what the supplier charges. A delivery note can support receipt processing, but it does not automatically prove the goods actually arrived in the stated quantity.

How Microsoft explains it. Microsoft explains three-way matching through price differences between order and invoice and quantity differences between invoice and receipt. Dynamics 365 invoice matching, checked on 26 September 2026. Specific policies and tolerances depend on the software and configuration.

Services. For services, an approved service-completion record may replace a physical receipt. Define that evidence explicitly. A consulting-hours invoice cannot sensibly be checked against warehouse stock just because the same application handles both processes.

Invoice total is too broad a matching unit. One line may be overstated and another understated while the total looks plausible. Connect lines through purchase-order number, order line and, where available, item reference.

AI can suggest an item when the supplier uses another description. Still verify unit, quantity and identity. “Box” and “piece” are not equivalent without an approved conversion. Similar wording must not silently map one product to a different one.

Line-level matching compares five fields, each with the evidence it needs:

Calculation basis. Price tolerance is a business policy, not a general recommendation from an AI model. Specify whether it is absolute, percentage-based or a combination. Define its calculation basis: unit price, line value or invoice total. Different bases can produce different decisions for the same document.

Quantity tolerances. Do not automatically apply the same tolerance to quantity. A missing single unit may matter for some goods, while agreed over- or under-delivery is normal in another process. The responsible owner must approve rules appropriate to the transaction.

Charges, discounts and currencies. Handle charges, discounts and foreign currencies explicitly. Passing a unit-price check can conceal unexpected freight. For currency conversion, define which values are directly comparable and which approved conversion is used.

Boundary tests. Test boundary values. If the policy allows a difference up to a stated amount, examples immediately below, at and above that amount should produce the intended results. Ambiguous wording such as “small differences are fine” is not an executable control.

The case. In an invented case, a business orders 100 units at EUR 12 each. It initially confirms receipt of 60. The supplier invoices 80 units at EUR 12 plus EUR 25 freight. The line amount is EUR 960, while quantity matching identifies 20 units not yet confirmed received.

The synthetic partial-delivery example contains these values:

What the workflow does. The workflow finds the order line and confirms the agreed unit price. It holds automatic approval because of quantity. Freight is checked separately because the original order did not include it. Purchasing receives two specific questions rather than a generic failure message.

Resolution. The owner finds that another 20 units arrived but were not recorded. Once receipt is confirmed, the quantity discrepancy clears. Freight remains unresolved until its basis is established. Only when both issues are decided does the invoice reach the intended approval state.

What the example shows. This is a proposed example, not an executed product comparison. It shows why separate reasons should remain visible. One “accept everything anyway” button would obscure important business decisions.

Allocated quantities. An order can be fulfilled through several deliveries and invoices. Check quantities already allocated before approving another invoice. If 60 received units were fully matched to an earlier bill, the same receipt cannot repeatedly justify new invoices.

Returns and cancellations. Returns and cancellations also change the available relationship. Retain history and rerun relevant checks when changes affect a previously assessed case. Do not overwrite the current quantity without preserving why it changed.

Several orders on one invoice. For an invoice covering several orders, each line needs its own association. If the destination system cannot represent the case as required, use an explicitly agreed manual process. The model should not disguise missing capabilities by inventing a combined reference.

Unmatched is not invalid. Also distinguish unmatched from invalid. A genuine invoice may arrive before receipt confirmation. Holding it in a visible waiting state can be appropriate; deleting or rejecting it solely because the receipt is not yet recorded can create unnecessary supplier disputes.

Discrepancies in three-way matching usually go to these owners:

Define these responsibilities and substitutes. A task should show the source, compared values, difference and decision required.

After correction, run matching again. Preserve the original discrepancy and its resolution. A manual exception requires a reason and an authorised person; it should not automatically change tolerance rules for future invoices.

Give unresolved tasks an age and next action. Otherwise the system can successfully detect every discrepancy while leaving invoices stalled indefinitely. Operational completion includes resolving exceptions, not merely identifying them.

Test complete delivery, partial delivery, excess invoicing, wrong units, extra freight, multiple orders and repeated invoices. Add a later correction to a goods receipt. Verify both the difference calculation and the actual approval state created.

Measure unnecessary warnings, missed discrepancies and time to resolution. Automation percentage alone can mislead when broad tolerances allow errors through. A useful three-way match accelerates straightforward invoices and explains which business decision remains outstanding for each exception.

These guides and service pages cover the decisions next to three-way matching:

• AI document processing: capture, review and transfer
• Design an invoice approval workflow with clear ownership
• Detect duplicate invoices with business keys and review
• Testing AI document processing: an acceptance template

For a workflow review, start with the task, systems involved and typical exceptions. Discuss it with modernagents.