How does three-way matching work in SAP?

1. 1

   Set tolerance limits per company code

   In Customizing for Logistics Invoice Verification (Invoice Block, Set Tolerance Limits; transaction OMR6 in many systems), define lower and upper limits for each tolerance key and company code: absolute amounts and percentages.
2. 2

   Flag PO items for GR-based invoice verification

   On the Invoice tab of each purchase order item, GR-based invoice verification ties invoice items to individual goods receipts, so an item cannot be invoiced before it is received and each invoice line is checked against a specific receipt.
3. 3

   Create the purchase order

   Create the PO (ME21N in SAP GUI, or the Manage Purchase Orders app) with quantities, net prices and, where you allow them, under- and overdelivery tolerances on the item.
4. 4

   Post the goods receipt

   Post the goods receipt against the PO (MIGO, movement type 101). This records the quantity received and posts the receipt value to the GR/IR clearing account.
5. 5

   Enter the supplier invoice against the PO

   In MIRO, or the Create Supplier Invoice app, enter the invoice with reference to the purchase order. SAP proposes the open received quantities and PO prices; adjust them to what the supplier actually billed.
6. 6

   Let the tolerance check decide

   On posting, SAP compares the invoice with the PO and goods receipt using the tolerance keys. Within limits, the invoice posts free for payment. If an upper limit is exceeded, it posts but is blocked for payment.
7. 7

   Release or correct blocked invoices

   Review blocked invoices (MRBR, or the Manage Supplier Invoices app). Release them once the variance is explained, or ask the supplier for a credit memo. Invoices whose blocking reason no longer applies, for example after the missing goods receipt is posted, can be released automatically in MRBR.
8. 8

   Keep GR/IR clean

   Monitor the GR/IR clearing account for receipts without invoices and invoices without receipts, and clear old differences (MR11) under your period-end process.

The invoice posts, so the liability is recorded, but payment is blocked. Purchasing confirms whether $3.38 was agreed. If it was, AP releases the invoice in MRBR. If not, AP asks the supplier for a credit memo of $180.00 and releases the invoice once the credit is posted.

• Very wide PP limits. Limits set to stop blocks rather than to control price let real overcharges through.
• GR-based IV off for goods. Invoices can then be matched to the PO item before anything is received.
• Bulk releases. Releasing the whole MRBR list at period end undoes the control; record a reason per invoice.
• Ignoring GR/IR. Old open items on GR/IR hide unreceived goods and unclaimed credits.

Aequo AP’s three-way matching runs on QuickBooks Online, Xero, FreshBooks, Zoho Books and Business Central today. If you run SAP alongside one of those systems, for example SAP at a parent company and a smaller ledger in a subsidiary, see how matching works in Aequo AP.