4-way matching in accounts payable: What it is and when to use it

In the accounts payable process, 4-way matching adds an extra layer of verification to help prevent overpayments, catch invoice discrepancies, and ensure that what's being paid for was actually received and approved. While not every business requires this level of control, it plays a crucial role in high-value, high-risk procurement.

This guide explains what 4-way matching is, how it works, how it compares to 2-way and 3-way matching, and when it makes sense to use it.

What is 4-way matching?

4-way matching is a method used in accounts payable to verify four key documents before approving a payment. These documents include:

• The purchase order
• The goods received note (GRN)
• The inspection report
• The supplier invoice

The goal is to ensure that the quantity, price, delivery, and quality of goods or services all match across each document. Only when all four align is the invoice approved for payment. This method is most commonly used in industries where goods must be inspected for quality or compliance before payment—like manufacturing, construction, or healthcare.

How the 4-way matching process works

Each document in the 4-way match plays a specific role in validating a transaction. Together, they ensure that the invoice reflects not just what was ordered and delivered—but also what passed inspection.

1. Purchase Order (PO)

The PO is the starting point of the transaction. It specifies what the buyer agreed to purchase, including product details, quantity, unit cost, and delivery terms. This becomes the baseline against which the rest of the documents are checked.

2. Invoice

The vendor's invoice requests payment for the items or services provided. It should mirror the PO in quantity and pricing. If there's a mismatch—like billing for more units or a different price—it’s flagged for review.

3. Receiving report

When the shipment arrives, the receiving team logs what was actually delivered. This document helps verify that the correct items and quantities arrived as expected. Any discrepancies here may indicate a short shipment or delivery issue.

4. Inspection report

The final step verifies whether the delivered items meet quality or compliance standards. The inspection report—typically prepared by a quality control team—confirms that what was received is in acceptable condition and meets the specifications outlined in the PO or contract.

Only when all four documents align is the invoice cleared for approval and payment.

Example of 4-way matching

A construction company places an order for 200 steel beams at $300 each, totaling $60,000. Here's how 4-way matching is applied before the invoice is approved:

• A purchase order is issued with the agreed quantity, price, and delivery terms
• When the beams arrive on-site, the receiving team confirms that all 200 were delivered as expected and logs a receiving report
• A quality inspection is conducted to verify that the beams meet size, grade, and structural specifications. The results are documented in an inspection report
• The supplier sends an invoice for $60,000—matching the PO, the delivery record, and the inspection results

Since all four documents align, the invoice is approved and ready for payment.

2-way vs. 3-way vs. 4-way matching

The right matching method depends on your business needs, transaction size, and risk level. Here’s how 2-way, 3-way, and 4-way matching compare:

While 2-way and 3-way matching work well for basic purchasing and fulfillment workflows, 4-way matching introduces a safeguard against poor quality or non-compliant goods. It’s the most robust—but also the most resource-intensive—matching method, best reserved for purchases that justify the added scrutiny.

When to use 4-way matching

4-way matching is most useful in industries or situations where payment depends on both delivery and quality verification. These typically include:

• Manufacturing: When sourcing raw materials or precision parts that must pass technical inspection before use in production. A single flawed component could compromise product integrity.
• Construction: For machinery, structural materials, or prefabricated parts that must meet specific tolerances or contractual specs before acceptance.
• Healthcare and pharmaceuticals: Where regulatory compliance and safety standards require that medical devices, drugs, or clinical supplies meet strict quality criteria.
• Aerospace and defense: In highly regulated supply chains where performance and traceability standards are non-negotiable.

If your business routinely handles critical or high-risk goods—and the cost of defects is high—4-way matching can help you prevent costly errors before payment is issued.

Benefits and drawbacks of 4-way matching

Adding more layers of control brings both protection and complexity. Here’s a breakdown:

Benefits of 4-way matching

• Improves payment accuracy: Ensures that payment is made only when goods meet agreed-upon standards.
• Reduces fraud and error: Adds an additional layer of review to catch pricing discrepancies, delivery mismatches, or unauthorized changes.
• Supports compliance: Helps meet industry or internal requirements for quality, safety, or financial control.
• Strengthens vendor accountability: Vendors are less likely to submit incomplete or inaccurate deliveries if they know inspections are part of the approval process.

Drawbacks of 4-way matching

• More time-consuming: Reviewing four documents adds steps to the AP process, especially without automation.
• Resource-intensive: Requires coordination between purchasing, receiving, quality control, and AP.
• Not necessary for all purchases: Adds overhead for routine, low-risk transactions where 2-way or 3-way matching would suffice.

How automation simplifies 4-way matching

Manual 4-way matching often creates bottlenecks—especially when AP teams must cross-check data across different systems or request missing documentation from other departments. The process is slow, error-prone, and easy to bypass without proper controls.

AP automation platforms make 4-way matching far more practical and scalable. Here's how:

• Extract and standardize data automatically: Optical character recognition (OCR) and AI-powered data capture pull key fields from invoices, POs, delivery receipts, and inspection reports.
• Match documents instantly: The system compares quantities, pricing, and quality fields across all four documents. Any mismatches are flagged in real time.
• Automate exception routing: Instead of chasing approvals manually, the platform sends flagged invoices to the appropriate reviewers based on rules you define.
• Track status from intake to resolution: Every step is logged and visible, making audits easier and helping teams close the books faster.
• Reduce human error and oversight gaps: By enforcing your matching policy consistently, automation ensures no steps are skipped—even when volumes increase.

With the right technology, 4-way matching no longer has to slow down your process. You get the protection without the friction.

Bring structure to invoice matching with Ramp

Ramp helps you catch discrepancies and enforce controls by automating invoice matching across your AP process. Instead of relying on manual checks, Ramp compares documents in real time and flags mismatches before they cause delays or overpayments.

With Ramp, you can:

• Extract invoice data with AI-powered OCR
• Match invoices to purchase orders, receipts, and inspection records
• Automate approval workflows and route exceptions to the right people
• Sync with your ERP for seamless reconciliation

Whether you need basic invoice validation or advanced quality control checks, Ramp helps you stay efficient, compliant, and in control. Explore how Ramp simplifies invoice matching—or try an interactive demo today.