Corrections enable you to adjust the invoiced price, quantity, or amount of previously matched purchase order shipments, distributions, or receipts. You can use a correction when a supplier sends an invoice for a change for an invoice you have already matched to a purchase order. This existing matched invoice, also known as the base-matched invoice, is the invoice that the correction is adjusting, and it represents the actual quantity, unit price, and amount being charged for the purchased goods.
To record a correction enter a Standard invoice to record a price increase, or enter a Credit Memo or Debit Memo to record a price decrease.
Price corrections adjust the invoiced unit price of previously matched purchase order shipments, distributions, or receipts, without adjusting the quantity billed.
You can record a simple price decrease correction by entering a credit or debit memo and matching to a base-matched invoice. However, we strongly recommend that you record all price corrections by matching to a purchase order or receipt.
Note: In amount matching of purchase orders, you cannot perform price corrections. See Amount Matching of Purchase Orders.
You can enter a correction only if all of the following are true:
the invoice type of the base-matched invoice is Standard or Mixed.
the amount of the correction will not reduce the total amount billed for the shipment to be less than zero.
When Invoice Validation checks whether the invoice price is within the tolerance allowed, it checks the weighted average price of the base matched invoice and all the price corrections associated with the base matched invoice.
To calculate the weighted average unit price, Payables uses this equation: (quantity * unit price) + (quantity * unit price) . . . / quantity invoiced for the base-matched invoice.
For example, the following table shows an invoice matched to a purchase order, and a subsequent price correction for the invoice:
| Transaction | Quantity | Unit Price | Amount |
|---|---|---|---|
| Base Matched Invoice | 10 | 1.00 | 10.00 |
| Price Correction | 5 | .20 | 1.00 |
The weighted average price in this example is 1.10 because (10 * 1.00) + (5 * .20) / 10 = 1.10.
However, if you provide no values for the quantity and unit price then the system uses the net amount of the price correction in the equation. For example, the following table shows a price correction with a negative amount but no values for Quantity or Unit Price:
| Transaction | Quantity | Unit Price | Amount |
|---|---|---|---|
| Base Matched Invoice | 10 | 1.00 | 10.00 |
| Price Correction | null | null | <1.00> |
The weighted average price is 9 because (10 * 1.00) + (-1.00) / 10 = 9.
When you enter a correction in the Invoice Workbench or Payables Open Interface, you provide the number of the base-matched invoice when:
you enter the Invoice Num field of the Find Purchase Orders for Matching window during purchase order matching.
you enter the Invoice Num field of the Find Receipts for Matching window during receipt matching.
you select an invoice in the Match to Invoice window when you match the price correction credit or debit memo directly to the base matched invoice.
you provide a value in the AP_INVOICE_LINES_INTERFACE.PRICE_CORRECT_INV_NUM column when you enter a price correction in the Payables Invoice Open Interface.