Use the Invoice Tolerances Template window to define the matching tolerances you want to allow for variances between invoice, purchase order, and receipt information. You can define both percentage-based and amount-based tolerances.
Tolerances determine whether Payables places matching or tax holds on an invoice. When you submit Payables Invoice Validation for an invoice that you have matched to a purchase order or receipt, Payables checks that the invoice matches the purchase order or receipt within the purchase order matching tolerances you define.
If you enter a zero for a percentage tolerance and enable the check box for that tolerance, Payables will not allow any variance at all. If you want a low tolerance, you can enter a very small percentage. If you enter no value, then Payables will allow infinite variance.
Payables displays next to the tolerance field the name of the hold that Payables Invoice Validation applies to your invoice if the variance exceeds the tolerance you define.
In the Invoice Tolerances Template window, select the check box for each tolerance you want to enforce, and enter tolerance levels for your purchase order matching transactions. Enter all amounts in your ledger currency.
Name. Enter a unique name for the invoice tolerance template.
Description. The description of the invoice tolerance template.
Type. Choose either Goods or Services. Goods represent quantity based tolerances and Services represents amount based tolerances.
Maximum/Quantity Ordered. Enter either the percent or quantity difference above purchase order shipment line quantity ordered that you allow suppliers to invoice. Payables Invoice Validation checks the quantity billed against the quantity ordered without taking price into consideration. Enter a Maximum Quantity Ordered tolerance only if most of your purchase orders are for the same relative value.
Maximum/Quantity Received. Enter either the percent or quantity difference above purchase order shipment line quantity received that you allow suppliers to invoice. Payables Invoice Validation checks the quantity billed against the quantity received without taking price into consideration. Enter a Maximum Quantity Received quantity tolerance only if most of your purchase orders are for the same relative value.
Price. The percentage difference above purchase order shipment line unit price that you allow suppliers to invoice.
Exchange Rate Amount. The amount of variance you allow between an invoice amount and the amount of the purchase order shipment to which it is matched. Payables compares the ledger currency of each, based on the invoice and purchase order exchange rates, respectively. Enter a value in this field only if you enter foreign currency invoices in Payables.
Shipment Amount. The amount of variance you allow between all invoice amounts (in transaction currency) matched to a shipment and the amount of the purchase order shipment. Payables Invoice Validation applies the Maximum Shipment Amount hold if the match exceeds the tolerance.
Total Amount. The total amount of variance you allow for both the Exchange Rate Amount variance and the Shipment Amount combined. If you do not use foreign currency, do not enter a value in this field.
Note: For the greatest control over your foreign currency invoices, you may choose to enter a Total Amount tolerance that is less than the total of your Shipment Amount and Exchange Rate Amount tolerances. For example, if your foreign currency invoice match is within the individual Exchange Rate Amount and Shipment Amount tolerances, you still may want Payables to prevent payment of the invoice because the exchange rate variance combined with the shipment amount variance, while within their individual tolerances, exceed your desired Total Amount tolerance.
Deselect the check box for the tolerance.