In the Procure to pay cycle, we all know it start from requisition to payment, thus it is equally important to understand the relation between PO and Invoice, which of course is subject to Matching based on tolerances level set.

How many ways for matching
They are mainly 3 ways:

• 2-ways
• 3-ways
• 4-ways

How to explain

2-way matching

This verifies verifies that Purchase order and invoice information match within your tolerances as follows:
Invoice price <= Purchase order price
Quantity billed <= Quantity Ordered

3-way matching

This verifies that the receipt and invoice information match with the quantity tolerances defined:
Invoice price <= Purchase order price
Quantity billed <= Quantity Ordered
Quantity billed <= Quantity received

4-way matching

This verifies that acceptance documents and invoice information match within the quantity tolerances defined:
Invoice price <= Purchase order price
Quantity billed <= Quantity Ordered
Quantity billed <= Quantity received
Quantity billed <= Quantity accepted

How to relate between PO and invoice tables:

Here are the entity relationship diagram, explaining 2 way and 3 way matching condition.

In summary