A three-way match exception log records every invoice that failed to match its purchase order and goods receipt: what differed, by how much, why, who resolved it and how. When an AI agent performs the matching, the log is where its exceptions land for a person to resolve, and the record auditors use to test the control.
What goes in the exception log?
Only the failures. A three-way match compares the invoice, the purchase order and the goods received note. When all three agree within tolerance, the invoice proceeds. When they do not, it stops, and the log records the exception until someone clears it.
The log matters for two reasons. It is the work queue for the AP team, and its pattern over time tells you where your purchasing process leaks: a supplier who always overbills freight, a warehouse that receipts late, a buyer who raises POs after the invoice arrives.
When should you use it?
Whenever invoices are matched, whether by a person or an agent. With an agent doing the matching, the log becomes the main human touchpoint. Matched invoices flow through; exceptions wait. How the matching itself works with an agent is set out in three-way matching with an AI agent.
Some invoices, typically services without a goods receipt, use a two-way match instead. Log those exceptions here too, marked as two-way.
How do you fill in each field?
- Exception type comes from a fixed list: price, quantity, missing receipt, missing PO, duplicate, tax, supplier mismatch. A fixed list lets you trend the log.
- Difference states the amount and the direction in plain words, for example "invoice 50 above PO on line 3".
- Agent's proposed cause is the agent's best explanation, with what it read. It is a proposal, not a finding.
- Resolution is one of: accept variance, request credit note, receipt goods, amend PO, reject invoice. Record who decided.
- Root cause is filled after resolution and feeds the monthly review.
The template
| Field | Guidance |
|---|---|
| Exception ID | Reference, such as TWM-0412 |
| Date raised | When the match failed |
| Supplier | As in supplier master |
| Invoice, PO, receipt refs | All three, or "missing" |
| Match type | Three-way or two-way |
| Exception type | Price, quantity, missing receipt, missing PO, duplicate, tax, supplier mismatch |
| Difference | Amount and description |
| Tolerance applied | The rule that the difference exceeded |
| Agent's proposed cause | Explanation and sources read |
| Assigned to | Named person or team |
| Resolution | Accept, credit note, receipt, amend PO, reject |
| Resolved by and date | Named person |
| Root cause | Process, supplier, system, or one-off |
| Days open | Calculated |
A filled example
A hypothetical food manufacturer, four exceptions from one week.
| ID | Supplier | Type | Difference | Agent's proposed cause | Resolution | Resolved by | Root cause |
|---|---|---|---|---|---|---|---|
| TWM-0412 | Packaging supplier | Price | Invoice 0.02 per unit above PO on 50,000 units, 1,000 total | Supplier price list shows increase effective this month; PO raised on old price | Accept, amend PO | Procurement lead | PO raised on outdated price list |
| TWM-0413 | Ingredients supplier | Quantity | Invoice 2,000 kg, receipt 1,800 kg | Receipt note mentions one pallet damaged and refused | Request credit note for 200 kg | AP supervisor | Supplier invoiced before checking delivery |
| TWM-0414 | Engineering contractor | Missing receipt | No GRN for service | Service; should be two-way. Contractor timesheet attached | Reclassify as two-way, approve | Maintenance manager | PO wrongly set to require GRN |
| TWM-0415 | Cleaning supplier | Duplicate | Same invoice number and amount as TWM-0398, paid last week | Supplier resent after a reminder | Reject invoice | AP clerk | Supplier resending on reminders |
Look at the root cause column across the week. Two of four come from your own purchasing process, not from suppliers. That is the kind of finding the log exists to surface.
Where Pryme fits
In Pryme, a match within tolerance can proceed at depth 3, while every exception is held for the named person on the row with the agent's proposed cause filed alongside. Changes to tolerances are recorded in the AI agent change log. More in books you can audit.
Questions people ask
What tolerance should we set?
Set it per category in policy, typically a small absolute amount per line and a lower one for high-risk categories. The agent should apply the tolerance you set, never a judgement of its own.
Can the agent resolve price exceptions itself?
It can propose a resolution and draft the credit note request. Accepting a variance commits money, so a person decides. Whether the agent can match at all is covered in whether an AI agent can match invoices to purchase orders.
How long should exceptions stay open?
Set a target, often five working days, and report anything older weekly. Old exceptions delay supplier payments and damage relationships.