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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) |
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.
Encumbrance Entries in Payables
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