Our current configuration for procurement categories is to have two-way matching and our finance team wants to use three-way matching on the purchasing policy with receiving required checked. A significant portion of our purchase orders use procurement categories.
85% of our procurement category purchases are done using purchase orders and a workflow approval with the orderer’s manager having to approve. Depending on the dollar amount the purchase order may require several approval before being confirmed. When the vendor invoice is received we have a workflow that uses the approver (user who ordered the material) assigned on the vendor invoice and routes through the workflow.
I am looking for some insight/issues encountered switching from two-way to three-way matching on procurement categories or challenges encountered using three-way matching on procurement categories.
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You can set two way vs three way matching by category (ie, some categories require two way match and some require three way match) via purchasing policy. Procurement and sourcing > Setup > Policies > Purchasing policies.
Three way match will require someone to receive the product to match and if the category is set as a three way match it isn’t possible to post an invoice without the receipt.
While it works on the same documents, the workflow works in tandem, not dependent on the 2/3 way match policy unless you’ve set your workflow specifically to look for matching policy.
We’ve had issues around receiving dollars vs quantity. D365 uses quantity, so when we have a PO for $100 in services and the vendor bills $50 and $50, there’s not a way to receive 2 receipts of $50 each, because the quantity 1 @ $50 was already received leaving the to be delivered quantity at 0. A way to work around that is to swap dollars and quantity (so quantity 100 at $1 each allows you to receive 50/50).
I’m sure it goes without saying that extensive testing would be critical of a change like this.
I hope this helps!
Hi Mike,
Switching from two-way to three-way matching is a common step when finance teams want stronger controls. The main difference is that invoices won’t match unless a receipt is recorded, so that step becomes very important.
A few things to keep in mind:
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Process impact – Invoices can get stuck if receipts aren’t entered on time, so ownership of that step is key.
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Workflows – Your PO and invoice approvals should still work, just make sure receiving fits in without slowing things down.
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Non-physical items – For things like services or licenses, you might want to keep them on two-way matching or add a simplified receipt step.
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User adoption – The real challenge is usually getting people to record receipts consistently, not the system itself.
It’s generally smooth once processes are aligned. Many companies test it first on high-value categories and then roll it out further.
If you’d like to discuss this in more detail or see how we’ve handled it in practice, feel free to reach out: hardik.gupta@allgrowtech.com