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.

In this guide, we'll explain 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

Comparing these four documents allows your accounts payable team to ensure payment accuracy, prevent fraud, and maintain proper financial controls. This comprehensive verification process helps safeguard company resources while building stronger supplier relationships, ultimately creating a more efficient and trustworthy procurement cycle for your business.

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 purchase order 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. The goods received note 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.

Who performs each step?

Successfully implementing 4-way matching requires clear ownership of each verification step. Different departments play crucial roles in this process, ensuring proper segregation of duties and maintaining financial controls throughout the procurement cycle.

By assigning clear ownership to each document, businesses create accountability and ensure thorough verification at every stage. This collaborative approach also strengthens internal controls while streamlining the entire payment approval process.

Example of 4-way matching

To better illustrate how 4-way matching works, let's look at an example scenario. 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:

1. A purchase order is issued with the agreed quantity, price, and delivery terms
2. When the beams arrive on-site, the receiving team confirms that all 200 were delivered as expected and logs a receiving report
3. A quality inspection is conducted to verify that the beams meet size, grade, and structural specifications. The results are documented in an inspection report
4. 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 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

Manufacturing environments often involve complex assembly processes where component quality directly impacts final product performance. Raw materials or precision parts must pass technical inspection before use in production. A single flawed component could compromise product integrity.

Implementing 4-way matching helps manufacturers maintain strict quality control throughout their supply chain, reducing costly production delays and potential warranty claims.

Construction

Construction projects typically involve significant capital investment and safety considerations that demand thorough verification. Machinery, structural materials, or prefabricated parts must meet specific tolerances or contractual specs before acceptance.

By incorporating inspection reports into the payment process, construction firms can document compliance with building codes and project specifications while protecting themselves from liability associated with substandard materials.

Healthcare and pharmaceuticals

Patient safety depends on the integrity of medical products, making thorough inspection absolutely essential. Regulatory compliance and safety standards require that medical devices, drugs, or clinical supplies meet strict quality criteria.

Healthcare organizations use 4-way matching to create audit trails that demonstrate regulatory compliance while ensuring that all products entering their facilities meet the exacting standards required for patient care.

Aerospace and defense

In highly regulated supply chains, performance and traceability standards are non-negotiable. These industries operate with zero tolerance for component failure, as lives often depend on product reliability.

The 4-way matching process helps aerospace and defense contractors document comprehensive testing and verification procedures, satisfying both government oversight requirements and internal quality management systems.

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

Benefits and drawbacks of 4-way matching

Finding the right balance between payment security and operational efficiency is essential for any accounts payable department. The advantages and potential challenges of implementing 4-way matching deserve careful consideration when determining whether it's right for your business.

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 invoice 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.

While 4-way matching offers enhanced control and accuracy, consider reserving it for high-value or critical purchases where quality verification justifies the additional resources and time investment in your approval workflow.

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 a 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's invoice management software simplifies invoice matching—or try an interactive demo today.