Three-Way Match: Purchase Order, Invoice and the Cargo on the Floor

Three things can disagree at receiving: what you ordered, what you are charged for and what actually arrived. Many importers compare only the last two, or only the last one, and so miss half of the problems. The three-way match compares all three in a fixed order and gives every difference a type and an owner. It is not complicated, but it does need the purchase order in the room and a sheet with three columns.

Three documents, three questions

• The purchase order, or the contract, answers: what did we agree to buy? Items, quantities, specification, colours and sizes, unit price, currency and delivery terms.
• The invoice answers: what are we being asked to pay? Items, quantities, unit price, total and payment terms.
• The cargo answers: what did we receive? What was counted, opened and checked.

The invoice is compared with the order before the shipment arrives, the cargo is compared with the invoice at the site, and the cargo is compared with the order for specification. The last step matters because an invoice can repeat the supplier's own mistake, whereas the order shows what you meant to buy.

Compare in a fixed order

1. Order against invoice, before arrival. Go line by line: item code and description, quantity, unit price, currency, total, payment terms and delivery terms. Look for substitutions (a different model or colour sent instead), changed prices and added charges. A difference found here costs one email, while the cargo is still on the road.
2. Invoice against cargo, at the site. Count the packages, read the codes on the cartons, open the agreed sample and compare the contents with the quantities billed.
3. Order against cargo, for specification. Colour, size, model and version are checked against what you ordered, not only against what the invoice says.

Remember that the order itself may have been amended by message or by phone. Use the latest version that both sides agreed in writing, and note which one it was.

Sort the differences by type

• Quantity: more or fewer than invoiced.
• Item: the wrong model, colour, size or version.
• Price and terms: a price, currency or charge that does not match the order. These are differences on paper only.
• Condition: damaged, wet or defective goods.
• Documents: missing or inconsistent papers.

Each type leads to a different conversation. A shortage goes to the supplier for a credit or a further shipment. A wrong item calls for a replacement, or for a decision to accept it at an agreed price. A price difference calls for a corrected invoice. Damage may involve the carrier or an insurer as well, so ask them how to proceed. Mix the types in one message and you send something nobody can answer in one reply.

A conditional example

You ordered 500 units, 300 black and 200 white, at USD 12 each, which is USD 6,000. The invoice shows 500 units at USD 12.50, which is USD 6,250. At the site you count 300 black, 188 white and 12 grey. Three differences emerge, each with its own line:

• Price: USD 12.50 against USD 12, so USD 250 more than the order (500 × 0.50). A paper difference only. Ask for a corrected invoice.
• Quantity: 12 white units fewer than ordered and invoiced.
• Item: 12 grey units that were not ordered.

The carton count may well agree with the packing list, and the total of 500 units does too. Only the three-way match shows that the contents are not what you bought. The requests that follow are separate: a corrected invoice at USD 12, a replacement for the 12 white units or, if you refuse the grey, a credit of 12 × 12 = USD 144, and a decision on whether to accept the grey at another price.

Common mistakes

• Treating the invoice as the definition of "correct", when the order is what you agreed.
• Using an old version of the order after it has been amended.
• Comparing totals only, so that a wrong colour split inside the same quantity never shows.
• Mixing units, such as pieces on one paper and sets on another.
• Leaving the order out of the shipment file, so nobody can find it later.

In short

The three-way match turns a vague feeling that something is wrong into three or four lines, each with an owner. CargoChek sets the papers against what is on the ground, counts the packages, checks samples against your specification and writes down for you what agreed and what did not.