Tolerances Setup In AP

Setup>Invoice>Tolerances

Overview:

Use the Invoice Tolerances window to define the matching and tax tolerances you want to allow for variances between invoice, purchase order, receipt and tax information. You can define both percentage based and amount based tolerances.

Tolerances determine whether payables should place holds during approval based on the limits set.

Quantity Ordered: Enter the percent difference above the purchase order shipment line quantity ordered that you allow suppliers to invoice. Invoice Validation process checks the quantity billed against the quantity ordered considering the tolerances specified and places an appropriate hold, if required.

For Example:

• PO Qty is 100 Units, Invoice Received for 107 units. Quantity Ordered tolerance is set at 5%. In this case the invoice Validation process will place “Qty Ordered” hold on the invoice.
  

• PO Qty is 100 Units, Invoice Received for 104 units. Quantity Ordered tolerance is set at 5%. In this case the invoice Validation process will not place any hold on the invoice.
  

Quantity Received: Enter the percent difference above purchase order line quantity received that you allow suppliers to invoice. Invoice Validation process checks the quantity billed against the quantity received taking into consideration the tolerances specified and places an appropriate hold, if required.

For Example:

• PO Qty is 100 Units, Qty Received 102, Invoice Received for 110 units. Quantity Received tolerance is set at 5%. In this case the invoice Validation process will place “Qty Received” hold on the invoice.
  

• PO Qty is 100 Units, Qty Received 102, Invoice Received for 105 units. Quantity Received tolerance is set at 5%. In this case the invoice Validation process will not place any hold on the invoice.
  

Price: The percentage difference above purchase order shipment line unit price that you allow suppliers to invoice

Tax: Validation validates the tax amount of tax distributions against the sum of the distributions the tax is allocated to. If the implied rate of the tax distributions you enter is different from the rate you enter for a particular tax code, including the tax tolerance you define, Validation applies Tax Variance hold to the invoice.