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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.
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.
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