Match tolerances
Match tolerances are used by the organization to determine an acceptable discrepancy between invoice and receipt/purchase order amounts. Tolerances are set up for each rule, for matching, Purchase order review messaging, reconciliation messaging, and service. Tolerances are defined for all match rules to automate the match process. Messaging tolerances determine when reconciliation messaging, quantity type service messaging, and amount type service messaging is to occur.
Tolerances allow transactions to match when they do not have exact match amounts and quantities. Without the match tolerances, operator intervention is required on every transaction that does not have an exact match. To ignore the difference, set up a tolerance amount or a percentage of the invoice amount on each match rule. Tolerances are defined for amounts or percentages under or over the comparison between the receipt/purchase order amount and invoice amount. If the invoice and receipt/purchase order vary by this amount or less, then the invoice will match. If a specific amount and percent of zero and the invoice and receipt/purchase order varies, then the invoice cannot match without intervention.
When setting up match tolerances, select between options that determine how to handle the difference between the receipt/purchase order and invoice amounts as it relates to the amount and percentage tolerance:
- AND option
If the invoice discrepancy falls outside of both the amount and percentage tolerance, then the match does not occur.
For example, set the amount tolerance to $5.00 and the percentage tolerance to 10%. The receipt is for $100, and the invoice is for $111. The invoice discrepancy is then $11.00. The match does not occur because the invoice discrepancy of $11.00 exceeds both the amount tolerance ($5.00) and the percentage tolerance (10% or $10.00).
- OR option
If the invoice discrepancy falls outside of either the amount tolerance or the percentage tolerance, then the match does not occur.
For example, set the amount tolerance to $5.00 and the percentage tolerance to 10%. The receipt is for $100, and the invoice is for $106. The invoice discrepancy is then $6.00. The match does not occur because the invoice discrepancy falls outside of one of the tolerances, the amount tolerance of $5.00.
Possible reasons for an invoice and receipt to not match perfectly are receiving problems, pricing errors, and data entry errors. The tolerance difference can be handled in one of two ways: pay the invoice in full, or chargeback the vendor for the difference between the invoice and the receipt. The chargeback is automatically generated.
For a Detail Match rule: If the match rule is defined to use the unit cost to compare to tolerance amounts, then the receipt quantity must equal the invoice quantity.
In a Detail Match, tolerances are used at the extended line item or unit line item. Within an Invoice Match, tolerances are applied at the invoice header. Generally speaking, the Invoice Match tolerances are tighter than the Detail Match tolerances. In addition to the tolerances for Amount differences, there are unit tolerance differences for most processes.