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Tolerances determine whether Payables places matching or tax holds on an invoice. When you submit Approval for an invoice you have matched to a purchase order, Payables checks that the invoice matches the purchase order within the matching tolerances you define. When you submit Approval 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 enter a $108 invoice and the tax rate is 8%. You have a 10% tax tolerance. You can enter a tax distribution amount anywhere from $8 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 treats the tolerance as infinite and will never apply a the corresponding hold to the invoice. If you want a low tolerance, you can enter a very small percentage.

Payables displays next to the tolerance field the name of the Hold that Payables will place on your invoice during Approval if the variance exceeds the tolerance you define.

   To set tolerance levels for your invoices:

• PO Matching

• Maximum/Quantity Ordered. Enter either the percent or quantity difference above purchase order shipment line quantity ordered that you allow suppliers to invoice. Approval 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. Approval 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 an invoice amount and the amount of the purchase order shipment to which it is matched. If either amount is in foreign currency, Payables compares the functional currency amounts by using the exchange rates of the invoice and purchase order shipment, respectively.

• 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.

Suggestion: 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.

• Tax

• Tax %. For Sales, Offset, and user-defined tax types, Approval validates the tax amount you enter on invoice distributions for a particular tax name against the sum of the item distributions that have the same tax name. If the implied rate of the tax distributions you enter is different from the rate you enter for a particular tax name, including the tax tolerance you define, Approval places a Tax Variance hold on the invoice.

• Tax Amount Range. The amount of variance you allow between the actual invoice tax amount and the invoice calculated tax amount.

   To inactivate a tolerance:

• Deselect the check box for the tolerance.