Case 8b, 9b: Quantity Outside Tolerance (Approved), Unit Price Outside Tolerance (Approved)
Scenario:
Both the quantity and unit price are outside the tolerance range but have been approved.
Action:
The system processes the transaction using the invoice values for both quantity and unit price, applying any necessary adjustments or line charges.
Example:
Purchase Order (PO):
Quantity: 200 units
Unit Price: $25.00 per unit
Total Amount: $5,000.00
Invoice Received:
Quantity: 220 units (outside tolerance of 10%, approved)
Unit Price: $27.00 per unit (outside tolerance of 8%, approved)
Total Amount: $5,940.00
Tolerance Levels:
Quantity Tolerance: ±5%
Unit Price Tolerance: ±2%
Since both the quantity (220 units) and unit price ($27.00) are outside the acceptable tolerance limits but have been approved, the system will:
Accept the Approved Quantity: The system accepts the invoiced quantity of 220 units as it has been approved despite being outside the tolerance range.
Accept the Approved Unit Price: The system accepts the invoiced unit price of $27.00 per unit as it has been approved despite being outside the tolerance range.
Calculate the Total Amount: The system calculates the total amount based on the approved invoice values:
Total Amount = Quantity × Unit Price
Total Amount = 220 units × $27.00 per unit = $5,940.00
Apply Necessary Adjustments or Line Charges: If applicable, the system may apply any additional line charges or adjustments based on the organization's policies for handling approved variances.
Process the Invoice: The system processes the invoice using the approved values for both quantity and unit price, finalizing the transaction at the total amount of $5,940.00.
This approach ensures that the transaction is processed according to the approved variances, allowing flexibility while maintaining accurate financial records.