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 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. When you submit Payables Invoice Validation for an invoice with a tax amount, Payables checks that the actual invoice tax amount equals the calculated tax amount within the tolerances you define.

If you use a percentage based tolerance, Payables calculates the tolerance based on the invoice amount, including tax. For example, you have a $100 item on an invoice and the tax rate is 8%. You have a 10% tax tolerance. You can enter a tax distribution amount between $7.20 to $8.80 without getting a Tax Variance hold on the invoice. 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.

PO Matching Purchase order matching tolerances apply to any purchase order matched invoice, including invoices matched to receipts.

• 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 functional 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.