How 3-way matching in NetSuite works: A quick guide

Ensuring accurate invoice payments is essential for any business using NetSuite, especially when managing purchase orders (POs) and goods receipts (GRs). While NetSuite provides the tools to implement 3-way matching, understanding how to configure and optimize the process can take time.

This guide covers how 3-way matching works in NetSuite and how businesses can enhance their accounts payable efficiency with additional automation tools.

What is 3-way matching in NetSuite?

3-way matching is an accounts payable process that verifies an invoice against its corresponding purchase order (PO) and goods receipt before approving payment. This ensures that businesses only pay for goods or services that were ordered, received, and billed correctly, preventing overpayments, fraud, and accounting errors.

3-way matching in NetSuite follows the standard AP process used in most ERP systems:

1. Compare the purchase order: This ensures the order details (items, quantity, and price) are correct before processing
2. Match the invoice to the PO: This confirms the vendor’s invoice aligns with what was originally ordered
3. Validate against the goods receipt (GR): This ensures the business has actually received the items before approving payment

If all three documents match within predefined tolerances, NetSuite processes the payment automatically. If discrepancies arise, the system flags the invoice for review, preventing overpayments or fraud.

When should businesses enable 3-way matching in NetSuite?

3-way matching is most useful when tracking physical goods, where verifying delivery before payment is essential. It also plays a key role in tightening financial controls, helping businesses catch duplicate payments and stay audit-ready.

With NetSuite’s built-in AP automation and customizable matching rules, AP teams can enforce compliance without slowing down operations.

How to set up 3-way matching in NetSuite

While naming conventions may vary across NetSuite modules, the general setup follows a structured process. Businesses can refer to NetSuite’s support documentation for module-specific guidance, but the core steps include:

1. Enable 3-way matching features: Go to Setup > Company > Enable Features and turn on Accounts Payable, Purchase Orders, Advanced Receiving, and SuiteFlow for workflow automation.
2. Set up matching preferences: Navigate to Setup > Accounting > Accounting Preferences, enable vendor bill approval routing, and configure tolerance levels for invoice mismatches.
3. Install the 3-way match workflow: Go to Customization > SuiteBundler > Search & Install Bundles, search for NetSuite Approvals Workflow, and install it.
4. Activate the approval workflow: Go to Customization > Scripting > Workflows, select 3 Way Match Vendor Bill Approval, and set the status to Released to automate invoice validation.
5. Assign approval roles and permissions: Define who approves invoices when discrepancies arise, ensuring AP teams, finance managers, and other relevant roles have the correct permissions.

Once configured, NetSuite automates invoice validation based on these rules, helping businesses to improve AP efficiency and establish financial controls.

What NetSuite does automatically vs. what requires manual work

Once 3-way matching is set up, NetSuite automates most of the verification process, reducing manual workload for accounts payable teams. However, some steps still require human oversight—especially when discrepancies arise.

Here’s what NetSuite handles automatically and what still needs manual review:

While NetSuite streamlines invoice matching and approval workflows, finance teams still need to step in when exceptions occur. By fine-tuning tolerance limits and approval workflows, businesses can strike the right balance between automation and oversight.

Challenges of 3-Way Matching in NetSuite

While NetSuite supports 3-way matching, some users on G2, a software review platform, often face challenges related to NetSuite’s overall workflow complexity, implementation process, and pricing concerns. These limitations can make invoice matching less efficient without additional customization or external support.

1. NetSuite’s pricing can make long-term use costly

NetSuite’s pricing structure can be a major drawback, especially for smaller teams. Some G2 users have noted that while NetSuite continues to enhance its platform, businesses often face high subscription costs.

For companies that only need basic AP automation and invoice matching, NetSuite may not be the most cost-effective solution in the long run.

2. Complex workflows require more extensive configuration

Some parts of NetSuite’s AP automation functionality may not automatically be enabled. Because of this, some users may need to manually configure approval workflows, tolerance levels, and automation rules before invoice matching works as expected.

Some users on G2 mention that enabling certain AP features can limit flexibility in other areas, forcing businesses to adjust their workflows. Additionally, exception handling still requires manual intervention, which can slow down AP processing.

3. Implementation can be time-consuming

While NetSuite offers a robust AP system, setting up 3-way matching and approval routing can be overwhelming—especially for companies transitioning from simpler accounting software. Some users on G2 report that the system’s interface is not user-friendly, making it difficult to find and adjust invoice settings.

Search limitations can also add to the challenge, sometimes requiring exact input to locate POs and invoices, which can slow down invoice approvals.

Key features to look for in 3-way matching software

Choosing the right 3-way matching software ensures a smooth and efficient accounts payable process. Businesses should look for solutions that provide:

• Seamless ERP integration: The software should sync with NetSuite or other ERP systems to pull purchase orders, invoices, and goods receipts automatically
• Automated invoice matching: AI-powered invoice-to-PO and goods receipt matching reduces manual review and speeds up approvals
• Customizable approval workflows: The ability to set multi-step approvals and tolerance thresholds helps teams manage discrepancies efficiently
• Exception handling and reporting: Strong exception flagging and audit trails make it easier to review mismatched invoices and maintain compliance
• Scalability and cost-effectiveness: The solution should scale with business growth while keeping pricing transparent and manageable over time

A well-designed 3-way matching system minimizes manual work, improves accuracy, and strengthens financial controls.

How Ramp provides key invoicing and AP Automation features

For businesses using NetSuite, ensuring accurate and efficient 3-way matching requires more than just a basic invoice processing workflow. Ramp offers a more automated approach to AP, streamlining invoice matching while reducing manual intervention.

Here’s how Ramp aligns with key AP automation and 3-way matching needs:

How 2-way and 3-way matching works in Ramp

Ramp’s matching process is integrated with NetSuite, reducing the need for manual reconciliation. Here’s how it works:

1. Ramp syncs purchase orders and goods receipts from NetSuite: POs and GRs are automatically pulled into Ramp, ensuring up-to-date records for invoice validation.
2. Invoices are matched against existing NetSuite records: When a new invoice is processed in Ramp, it’s automatically matched to a PO (2-way match) or both a PO and goods receipt (3-way match). If everything aligns within predefined tolerance levels, Ramp marks the invoice as approved.
3. Discrepancies are flagged and routed for review: If an invoice doesn’t match the expected PO or GR details, Ramp triggers an exception approval workflow.
4. Final approval and NetSuite reconciliation: Once the invoice passes the verification process, it’s automatically recorded in NetSuite with the correct GL coding, vendor details, and payment status.

For a deeper look at how Ramp integrates with NetSuite for 3-way matching, explore our detailed breakdown. By automating these steps, Ramp reduces the manual effort required for invoice matching in NetSuite, allowing businesses to streamline AP operations.

Automate 3-way matching with Ramp

The right invoice matching solution should integrate smoothly with your AP workflows, eliminate inefficiencies, and scale with your business. While NetSuite’s built-in invoice matching tools provide a solid foundation, businesses needing greater automation and flexibility often turn to third-party solutions.

That’s why businesses rely on Ramp to streamline 2-way and 3-way matching, ensuring invoices match purchase orders and goods receipts with minimal manual effort. Ramp’s integration with NetSuite automates invoice validation, reducing approval times and catching discrepancies before they become payment issues.

Faster approvals, fewer mismatches, and stronger financial control—without the complexity of manual reconciliation. Get started with Ramp.