2-Way, 3-Way and 4-Way Matching in Oracle Purchasing

To save the organization from payment to fraudulent invoices PO-Matching is done. The validation of PO quantity with different set of quantities is the criterion for 2-Way, 3-Way and 4-Way matching. We can say that PO-Matching is one of the important aspects of Oracle Purchasing. Moreover, this is the favorite topic of interviewers to ask in PO module.

Why PO-Matching Is Essential?

PO-Matching if not successful will put the invoice on hold. It prohibits wrong payment to the vendor for whom the Purchase Order is generated. Once the rules of 2-Way, 3-Way and 4-Way matching are met hold is released. PO-Matching is essential to ensure the valid payment to invoices.

2-Way Matching

In 2-Way matching, Invoice is matched with PO for two attributes:

  • PO Quantity: Invoice quantity is less than or equal to purchase order quantity
  • PO Price: Invoice price is less than or equal to purchase order price

3-Way Matching

In 3-Way matching, in addition to the attributes of 2-Way matching, received quantity is taken into consideration:

  • PO Quantity: Invoice quantity is less than or equal to purchase order quantity
  • Received Quantity: Invoice quantity is less than or equal to received quantity
  • PO Price: Invoice price is less than or equal to purchase order price

4-Way Matching

4-Way matching takes into account accepted Purchase Order quantity in addition to above three attributes:

  • PO Quantity: Invoice quantity is less than or equal to purchase order quantity
  • Received Quantity: Invoice quantity is less than or equal to received quantity
  • Accepted PO Quantity: Invoice quantity is less than or equal to quantity accepted against that purchase order
  • PO Price: Invoice price is less than or equal to purchase order price

Organization Prefers

Most of the organizations use 3-Way matching as the most preferred type of PO-Matching.

Tolerance

Tolerance plays another vital part in determining the PO-Matching criteria. Sometimes organizations consider quantities inside the tolerance level as matched quantities.

For example,

Ordered quantity – 100

Tolerance – 5%

Invoice quantity – 103 (acceptable and match)

PO-Matching Setup

You can setup PO match at below mentioned levels.

  • Supplier level
  • Supplier site level
  • Purchasing Options
  • Purchasing Order Shipment level

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