Invoice Variances (Oracle Payables Help)


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Invoice Variances

If you use Accrual Basis Accounting, and have Oracle Purchasing Installed, Payables records variances when you approve and post a purchase order matched invoice distribution. Variances are the differences between the purchase order and invoice in Price, Quantity, and, for foreign currency transactions, Exchange Rate.

The following formulas show how Payables calculates the invoice amount, purchase order amount, and the variance amounts.

Invoice Variances

Purchase Order Amount PO Qty x PO Price x PO Rate

Invoice Amount Invoice Qty x Invoice Price x Invoice Rate

Expense (Invoice Distribution Amount)
All in functional currency if this is a foreign currency transaction. PO Amount + Invoice Price Variance + Quantity Variance + Exchange Rate Variance

Invoice Price Variance Invoice Qty x (Invoice Price - PO Price) x Invoice Rate

Quantity Variance (Invoice Qty - PO Qty) x PO Price x PO Rate

Exchange Rate Variance Invoice Qty x PO Price x (Invoice Rate - PO Rate)

Table 1 - 10. (Page 1 of 1)

Invoice Variances

Purchase Order Amount	PO Qty x PO Price x PO Rate
Invoice Amount	Invoice Qty x Invoice Price x Invoice Rate
Expense (Invoice Distribution Amount) All in functional currency if this is a foreign currency transaction.	PO Amount + Invoice Price Variance + Quantity Variance + Exchange Rate Variance
Invoice Price Variance	Invoice Qty x (Invoice Price - PO Price) x Invoice Rate
Quantity Variance	(Invoice Qty - PO Qty) x PO Price x PO Rate
Exchange Rate Variance	Invoice Qty x PO Price x (Invoice Rate - PO Rate)
Table 1 - 10. (Page 1 of 1)

Note: The balancing entry to encumbrances is the reserve for encumbrances. The associated encumbrances use the same formulas; for example, the encumbrance for a purchase order is calculated according to the formula PO Qty x PO Price x PO Rate.

During Approval, Payables applies holds to purchase order matched invoices that exceed tolerances you define for price, quantity, and exchange rate differences.

Invoice Variances

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