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The header charge per unit is outside tolerance and has not been approved.
The system adjusts the header charge to match the purchase order, processing the transaction accordingly, and generating any necessary notes.
Purchase Order (PO):
Header Charge Per Unit: $4.00
Quantity: 1,500 units
Total Header Charge Amount: $6,000.00
Invoice Received:
Header Charge Per Unit: $5.00 (outside tolerance of 25%, rejected)
Quantity: 1,500 units
Total Header Charge Amount: $7,500.00
Tolerance Levels:
Header Charge Per Unit Tolerance: ±5%
Since the header charge per unit ($5.00) exceeds the acceptable tolerance range of 5% and has not been approved, the system will:
Reject the Invoiced Header Charge Per Unit: The system does not accept the invoiced header charge per unit of $5.00 due to the variance exceeding the tolerance limit.
Adjust the Header Charge Per Unit: The system adjusts the charge per unit to match the original purchase order or the approved charge per unit:
Adjusted Header Charge Per Unit = $4.00 (from PO)
Recalculate the Total Header Charge Amount: The system recalculates the total charge amount based on the adjusted charge per unit:
Corrected Total Header Charge Amount = Quantity × Adjusted Header Charge Per Unit
Corrected Total Header Charge Amount = 1,500 units × $4.00 = $6,000.00
Generate a Credit Note: Since the original invoice total was higher than the corrected total, the system generates a credit note for the overcharged amount:
Credit Note Amount = Original Invoice Total - Corrected Total Header Charge Amount
Credit Note Amount = $7,500.00 - $6,000.00 = $1,500.00
Process the Invoice: The system processes the invoice with the corrected total charge amount of $6,000.00 and issues a credit note for $1,500.00 to account for the overcharged amount.
This approach ensures that the transaction is aligned with the original terms of the purchase order, maintaining accurate financial processing while correcting any overcharges.
The header charge per unit is within the acceptable tolerance range compared to the purchase order.
The system processes the header charge as invoiced, applying it without adjustments.
Purchase Order (PO):
Header Charge Per Unit: $3.50
Quantity: 1,200 units
Total Header Charge Amount: $4,200.00
Invoice Received:
Header Charge Per Unit: $3.55 (within tolerance of 1.43%)
Quantity: 1,200 units
Total Header Charge Amount: $4,260.00
Tolerance Levels:
Header Charge Per Unit Tolerance: ±2%
Since the header charge per unit ($3.55) is within the acceptable tolerance range of 2% compared to the purchase order, the system will:
Accept the Header Charge Per Unit: The system accepts the invoiced header charge per unit of $3.55 as it falls within the defined tolerance limit.
Process the Header Charge: The system processes the invoice with the total header charge amount based on the invoiced charge per unit and quantity:
Total Header Charge Amount = Quantity × Header Charge Per Unit
Total Header Charge Amount = 1,200 units × $3.55 = $4,260.00
Finalize the Invoice: The system processes the transaction without any adjustments, accepting the invoice as it is.
This approach ensures smooth and efficient processing of transactions when the header charges fall within the acceptable tolerance range, avoiding unnecessary rejections or delays.
Both the quantity and unit price on the invoice are within an acceptable tolerance range compared to the purchase order.
The system accepts the invoice values and calculates the total amount based on the provided quantity and unit price.
Purchase Order (PO):
Quantity: 100 units
Unit Price: $10.00 per unit
Total Amount: $1,000.00
Invoice Received:
Quantity: 101 units (within tolerance of 1%)
Unit Price: $10.05 per unit (within tolerance of 0.5%)
Total Amount: $1,015.05
Tolerance Levels:
Quantity Tolerance: ±2%
Unit Price Tolerance: ±1%
Since the quantity (101 units) and unit price ($10.05) are both within the acceptable tolerance levels compared to the purchase order, the system will:
1. Accept the Invoice Values: The quantity and unit price on the invoice are accepted as valid because they fall within the defined tolerance limits.
2. Calculate the Total Amount: The total amount is calculated using the accepted values:
• Total Amount = Quantity × Unit Price
• Total Amount = 101 units × $10.05 per unit = $1,015.05
3. Process the Invoice: The invoice is processed with the total amount of $1,015.05, and the financial records are updated accordingly.
This approach ensures that minor discrepancies that fall within acceptable tolerance levels do not lead to invoice rejections or delays in payment, thus streamlining the financial process.
The quantity on the invoice is within tolerance, but the unit price is outside the acceptable tolerance range. However, this variance in the unit price has been reviewed and approved by the appropriate authorities.
The system adjusts the unit price to match the purchase order and applies any necessary line charges to account for the difference.
Purchase Order (PO):
Quantity: 100 units
Unit Price: $10.00 per unit
Total Amount: $1,000.00
Invoice Received:
Quantity: 100 units (within tolerance)
Unit Price: $11.00 per unit (outside tolerance of ±5%)
Total Amount: $1,100.00
Tolerance Levels:
Quantity Tolerance: ±2%
Unit Price Tolerance: ±5% (expected range: $9.50 to $10.50)
Approval:
• The $11.00 unit price is outside the tolerance range but has been manually approved by the appropriate department.
Since the quantity is within tolerance but the unit price is outside tolerance (yet approved), the system will:
1. Adjust the Unit Price: The system adjusts the unit price back to the PO’s unit price because the variance was approved:
• Adjusted Unit Price = $10.00 per unit
• Adjusted Total Amount = 100 units × $10.00 per unit = $1,000.00
2. Apply a Line Charge for the Difference: Since the approved unit price of $11.00 is higher than the PO unit price of $10.00, the system applies a line charge to account for this difference:
• Line Charge Amount = (Approved Invoice Unit Price - PO Unit Price) × Quantity
• Line Charge Amount = ($11.00 - $10.00) × 100 units = $100.00
3. Process the Invoice: The system processes the invoice with:
• Base Amount: $1,000.00
• Line Charge: $100.00
• Total Processed Amount: $1,100.00
This ensures that while the base PO values are maintained for consistency, the approved variance in the unit price is accounted for through an additional line charge, resulting in accurate financial processing and record-keeping.
The header charge per unit is outside tolerance but has been approved.
The system processes the approved charge per unit, applying it to the transaction.
Purchase Order (PO):
Header Charge Per Unit: $2.50
Quantity: 2,000 units
Total Header Charge Amount: $5,000.00
Invoice Received:
Header Charge Per Unit: $3.00 (outside tolerance of 20%, approved)
Quantity: 2,000 units
Total Header Charge Amount: $6,000.00
Tolerance Levels:
Header Charge Per Unit Tolerance: ±5%
Since the header charge per unit ($3.00) exceeds the acceptable tolerance range of 5% but has been approved, the system will:
Accept the Approved Header Charge Per Unit: The system accepts the invoiced header charge per unit of $3.00 as it has been approved despite exceeding the tolerance limit.
Process the Header Charge: The system processes the invoice using the approved charge per unit and the quantity:
Total Header Charge Amount = Quantity × Approved Header Charge Per Unit
Total Header Charge Amount = 2,000 units × $3.00 = $6,000.00
Finalize the Invoice: The system processes the transaction with the approved charges, reflecting the total amount of $6,000.00.
This approach allows the system to accommodate approved variances in header charges, ensuring that the transaction is processed according to the approval while maintaining accurate financial records.
TransactionConfig Pro Template is a powerful configuration tool designed for enterprise environments to manage the processing of financial documents, such as invoices, debit notes, and credit notes. The tool provides detailed mapping and field definitions that allow businesses to automate and customize their financial workflows with precision. Integrating seamlessly with existing Infor ERP systems, TransactionConfig Pro Template ensures accurate handling of complex transactions while maintaining compliance with global financial standards.
• Detailed Mapping: Allows for precise mapping of fields across various transaction types, ensuring data consistency and accuracy.
• Customization: Supports customization of financial document workflows to meet specific business needs.
• Automation: Automates the handling of financial transactions, reducing manual errors and increasing efficiency.
• Integration: Easily integrates with existing Infor M3/LN ERP systems, enhancing the overall financial processing capabilities of the organization.
• Compliance: Ensures compliance with international financial standards and regulations, helping businesses manage global transactions effectively.
TransactionConfig Pro Template includes a series of predefined rules to handle common discrepancies between invoice data and purchase order (PO) data. These rules are designed to automate decision-making when variances occur, ensuring consistency and accuracy in financial processing.
Scenario: Both the quantity and unit price on the invoice are within an acceptable tolerance range compared to the purchase order.
• Action: The system accepts the invoice values and calculates the total amount based on the provided quantity and unit price.
Scenario: The quantity on the invoice is within tolerance, but the unit price is outside tolerance, and this variance has been approved.
• Action: The system adjusts the unit price to match the purchase order and applies any necessary line charges to account for the difference.
Scenario: The quantity is within tolerance, but the unit price is below the acceptable range (negative tolerance) and is not approved.
• Action: The system rejects the unit price, adjusts it to match the purchase order, and generates a credit note for the difference. Additional header charges may be applied as necessary.
Scenario: The quantity is within tolerance, but the unit price exceeds the acceptable range (positive tolerance) and is not approved.
• Action: The system rejects the invoice unit price, adjusts it to match the purchase order, and may generate a debit note to account for the overcharged amount.
Scenario: The quantity on the invoice is outside the acceptable tolerance but has been approved, while the unit price remains within tolerance.
• Action: The system accepts the approved quantity and the unit price as per the invoice and processes the transaction accordingly.
Scenario: The quantity on the invoice exceeds the acceptable range (positive) and is rejected, but the unit price is within tolerance.
• Action: The system adjusts the quantity to the approved level, maintaining the unit price, and processes the transaction. Any excess quantity is rejected and not invoiced.
Scenario: The quantity is below the acceptable range (negative tolerance) and is not approved, though the unit price is within tolerance.
• Action: The system adjusts the quantity to match the approved level, keeping the unit price consistent. The transaction is processed accordingly.
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.
Scenario: Both the quantity and unit price are outside tolerance, and neither has been approved.
• Action: The system rejects the invoice data, adjusts the values to match the purchase order, and generates necessary debit or credit notes.
Scenario: The quantity exceeds the acceptable range (positive) and is rejected, and the unit price is also outside tolerance and rejected.
• Action: The system adjusts the quantity and unit price to match the approved levels from the purchase order, rejecting any excesses, and processes the transaction.
Scenario: The charge per unit on the invoice is within the acceptable tolerance range compared to the purchase order.
• Action: The system accepts the charge per unit as invoiced and processes the transaction without adjustments.
Scenario: The charge per unit is outside tolerance but has been approved.
• Action: The system accepts the charge per unit and applies the approved charges, processing the transaction accordingly.
Scenario: The charge per unit is outside tolerance and has not been approved.
• Action: The system adjusts the charge per unit to match the purchase order or approved levels, generating any necessary debit or credit notes.
Scenario: The header charge per unit is within the acceptable tolerance range compared to the purchase order.
• Action: The system processes the header charge as invoiced, applying it without adjustments.
Scenario: The header charge per unit is outside tolerance but has been approved.
• Action: The system processes the approved charge per unit, applying it to the transaction.
Scenario: The header charge per unit is outside tolerance and has not been approved.
• Action: The system adjusts the header charge to match the purchase order, processing the transaction accordingly, and generating any necessary notes.
Scenario: Handles discrepancies in tax amounts between the invoice and purchase order.
• Action: The system adjusts the tax lines according to the approved tax rates and amounts, ensuring compliance with applicable tax regulations.
The charge per unit is outside tolerance and has not been approved.
The system adjusts the charge per unit to match the purchase order or approved levels, generating any necessary debit or credit notes.
Purchase Order (PO):
Charge Per Unit: $6.00
Quantity: 800 units
Total Charge Amount: $4,800.00
Invoice Received:
Charge Per Unit: $7.00 (outside tolerance of 16.67%, rejected)
Quantity: 800 units
Total Charge Amount: $5,600.00
Tolerance Levels:
Charge Per Unit Tolerance: ±5%
Since the charge per unit ($7.00) exceeds the acceptable tolerance range of 5% and has not been approved, the system will:
Reject the Invoiced Charge Per Unit: The system does not accept the invoiced charge per unit of $7.00 due to the variance exceeding the tolerance limit.
Adjust the Charge Per Unit: The system adjusts the charge per unit to match the purchase order or the approved charge per unit:
Adjusted Charge Per Unit = $6.00 (from PO)
Recalculate the Total Charge Amount: The system recalculates the total charge amount based on the adjusted charge per unit:
Corrected Total Charge Amount = Quantity × Adjusted Charge Per Unit
Corrected Total Charge Amount = 800 units × $6.00 = $4,800.00
Generate a Debit Note: Since the original invoice total was higher than the corrected total, the system generates a debit note for the overcharged amount:
Debit Note Amount = Original Invoice Total - Corrected Total Charge Amount
Debit Note Amount = $5,600.00 - $4,800.00 = $800.00
Process the Invoice: The system processes the invoice with the corrected total charge amount of $4,800.00 and issues a debit note for $800.00 to account for the overcharged amount.
This approach ensures that financial transactions are consistent with the purchase order terms, rejecting unapproved variances and maintaining accurate billing practices.
The quantity exceeds the acceptable range (positive) and is rejected, and the unit price is also outside tolerance and rejected.
The system adjusts the quantity and unit price to match the approved levels from the purchase order, rejecting any excesses, and processes the transaction.
Purchase Order (PO):
Quantity: 200 units
Unit Price: $50.00 per unit
Total Amount: $10,000.00
Invoice Received:
Quantity: 220 units (outside tolerance of 10%, rejected)
Unit Price: $55.00 per unit (outside tolerance of 10%, rejected)
Total Amount: $12,100.00
Tolerance Levels:
Quantity Tolerance: ±5%
Unit Price Tolerance: ±2%
Since both the quantity (220 units) and unit price ($55.00) exceed the acceptable tolerance limits and neither has been approved, the system will:
Reject the Excess Quantity: The system does not accept the invoiced quantity of 220 units and adjusts it to match the original purchase order.
Adjusted Quantity = 200 units (from PO)
Reject the Invoice Unit Price: The system does not accept the invoiced unit price of $55.00 and adjusts it to match the original purchase order.
Adjusted Unit Price = $50.00 per unit (from PO)
Recalculate the Total Amount: The system calculates the total amount using the adjusted quantity and unit price:
Corrected Total Amount = Adjusted Quantity × Adjusted Unit Price
Corrected Total Amount = 200 units × $50.00 per unit = $10,000.00
Process the Invoice: The system processes the invoice with the corrected total amount of $10,000.00, rejecting the excess quantity and higher unit price.
This approach ensures that the transaction aligns with the original terms of the purchase order, maintaining consistent pricing and quantity controls while rejecting unapproved variances.
Both the quantity and unit price are outside the tolerance range but have been approved.
The system processes the transaction using the invoice values for both quantity and unit price, applying any necessary adjustments or line charges.
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.
Both the quantity and unit price are outside tolerance, and neither has been approved.
The system rejects the invoice data, adjusts the values to match the purchase order, and generates necessary debit or credit notes.
Purchase Order (PO):
Quantity: 150 units
Unit Price: $30.00 per unit
Total Amount: $4,500.00
Invoice Received:
Quantity: 140 units (outside tolerance of -6.67%, rejected)
Unit Price: $33.00 per unit (outside tolerance of 10%, rejected)
Total Amount: $4,620.00
Tolerance Levels:
Quantity Tolerance: ±5%
Unit Price Tolerance: ±2%
Since both the quantity (140 units) and unit price ($33.00) are outside the acceptable tolerance limits and neither has been approved, the system will:
Reject the Invoice Data: The system does not accept the invoiced quantity or unit price due to their deviation from the tolerance limits.
Adjust the Quantity: The system adjusts the quantity to match the original purchase order quantity.
Adjusted Quantity = 150 units (from PO)
Adjust the Unit Price: The system adjusts the unit price to match the original purchase order unit price.
Adjusted Unit Price = $30.00 per unit (from PO)
Recalculate the Total Amount: The system recalculates the total amount using the adjusted quantity and unit price:
Corrected Total Amount = Adjusted Quantity × Adjusted Unit Price
Corrected Total Amount = 150 units × $30.00 per unit = $4,500.00
Generate a Debit Note: Since the original invoice total was higher than the corrected total, the system generates a debit note for the overcharged amount.
Debit Note Amount = Original Invoice Total - Corrected Total Amount
Debit Note Amount = $4,620.00 - $4,500.00 = $120.00
Process the Invoice: The system processes the invoice with the corrected total amount of $4,500.00 and issues a debit note for $120.00 to offset the overcharged amount.
This approach ensures that the financial transaction is corrected to match the purchase order terms, maintaining accurate and fair billing practices.
The charge per unit is outside tolerance but has been approved.
The system accepts the charge per unit and applies the approved charges, processing the transaction accordingly.
Purchase Order (PO):
Charge Per Unit: $4.50
Quantity: 1,000 units
Total Charge Amount: $4,500.00
Invoice Received:
Charge Per Unit: $5.00 (outside tolerance of 11.11%, approved)
Quantity: 1,000 units
Total Charge Amount: $5,000.00
Tolerance Levels:
Charge Per Unit Tolerance: ±5%
Since the charge per unit ($5.00) is outside the acceptable tolerance range of 5% but has been approved, the system will:
Accept the Approved Charge Per Unit: The system accepts the invoiced charge per unit of $5.00 as it has been approved despite exceeding the tolerance limit.
Process the Transaction: The system processes the invoice using the approved charge per unit and the quantity:
Total Charge Amount = Quantity × Approved Charge Per Unit
Total Charge Amount = 1,000 units × $5.00 = $5,000.00
Finalize the Invoice: The system processes the transaction with the approved charges, reflecting the total amount of $5,000.00.
This approach ensures that the system can accommodate approved variances in charges, allowing flexibility while maintaining accurate financial records.
The quantity is below the acceptable range (negative tolerance) and is not approved, though the unit price is within tolerance.
The system adjusts the quantity to match the approved level, keeping the unit price consistent. The transaction is processed accordingly.
Purchase Order (PO):
Quantity: 150 units
Unit Price: $20.00 per unit
Total Amount: $3,000.00
Invoice Received:
Quantity: 140 units (outside tolerance of -6.67%, rejected)
Unit Price: $20.00 per unit (within tolerance)
Total Amount: $2,800.00
Tolerance Levels:
Quantity Tolerance: ±5%
Unit Price Tolerance: ±2%
Since the quantity (140 units) is below the acceptable tolerance limit (negative variance of -6.67%) and is not approved, but the unit price ($20.00) is within tolerance, the system will:
Reject the Lower Quantity: The system does not accept the lower quantity since it is outside the approved tolerance range.
Adjust the Quantity: The system adjusts the quantity to match the approved level specified in the purchase order.
Approved Quantity = 150 units (from PO)
Maintain the Unit Price: The unit price of $20.00 per unit is within tolerance and remains unchanged.
Recalculate the Total Amount: The system calculates the total amount using the approved quantity and the accepted unit price:
Total Amount = Approved Quantity × Unit Price
Total Amount = 150 units × $20.00 per unit = $3,000.00
Process the Invoice: The system processes the invoice with the adjusted total amount of $3,000.00, reflecting the approved quantity and unit price. The supplier is expected to invoice for the full approved quantity.
This approach ensures that the financial transaction aligns with the purchase order's terms, and prevents under-invoicing while maintaining accurate financial records.
The quantity is within tolerance, but the unit price is below the acceptable range (negative tolerance) and is not approved.
The system rejects the unit price, adjusts it to match the purchase order, and generates a credit note for the difference. Additional header charges may be applied as necessary.
Purchase Order (PO):
Quantity: 100 units
Unit Price: $10.00 per unit
Total Amount: $1,000.00
Invoice Received:
Quantity: 100 units (within tolerance of 0%)
Unit Price: $9.00 per unit (outside negative tolerance of -10%)
Total Amount: $900.00
Tolerance Levels:
Quantity Tolerance: ±2%
Unit Price Tolerance: ±1%
Since the quantity (100 units) is within the acceptable tolerance range but the unit price ($9.00) is below the acceptable tolerance and is not approved, the system will:
Reject the Unit Price: The system does not accept the invoiced unit price of $9.00.
Adjust the Unit Price: The system adjusts the unit price to match the original purchase order unit price.
Adjusted Unit Price = $10.00 (from PO)
Calculate the Corrected Total Amount: Using the adjusted unit price, the system recalculates the total amount.
Corrected Total Amount = Quantity × Adjusted Unit Price
Corrected Total Amount = 100 units × $10.00 per unit = $1,000.00
Generate a Credit Note: The system generates a credit note for the difference between the incorrect total amount on the invoice and the corrected total amount.
Credit Note Amount = Original Invoice Total - Corrected Total Amount
Credit Note Amount = $900.00 - $1,000.00 = -$100.00
The credit note will effectively reverse the undercharge.
Process the Invoice: The system processes the invoice with the adjusted total amount of $1,000.00 and applies the credit note for $100.00 to account for the undercharged unit price.
This approach ensures that the pricing aligns with the purchase order terms, even when an incorrect, lower price is invoiced.
The quantity is within tolerance, but the unit price exceeds the acceptable range (positive tolerance) and is not approved.
The system rejects the invoice unit price, adjusts it to match the purchase order, and may generate a debit note to account for the overcharged amount.
Purchase Order (PO):
Quantity: 200 units
Unit Price: $15.00 per unit
Total Amount: $3,000.00
Invoice Received:
Quantity: 198 units (within tolerance of 1%)
Unit Price: $17.00 per unit (outside positive tolerance of 13.33%)
Total Amount: $3,366.00
Tolerance Levels:
Quantity Tolerance: ±2%
Unit Price Tolerance: ±1%
Since the quantity (198 units) is within the acceptable tolerance range but the unit price ($17.00) exceeds the acceptable tolerance and is not approved, the system will:
Reject the Invoice Unit Price: The system does not accept the invoiced unit price of $17.00.
Adjust the Unit Price: The system adjusts the unit price to match the original purchase order unit price.
Adjusted Unit Price = $15.00 (from PO)
Calculate the Corrected Total Amount: Using the adjusted unit price, the system recalculates the total amount.
Corrected Total Amount = Quantity × Adjusted Unit Price
Corrected Total Amount = 198 units × $15.00 per unit = $2,970.00
Generate a Debit Note: The system generates a debit note to account for the difference due to the overcharge.
Debit Note Amount = Original Invoice Total - Corrected Total Amount
Debit Note Amount = $3,366.00 - $2,970.00 = $396.00
This debit note represents the amount overcharged by the supplier.
Process the Invoice: The system processes the invoice with the corrected total amount of $2,970.00 and issues a debit note for $396.00 to offset the overcharge.
This approach ensures that any overcharging is corrected, aligning the transaction with the purchase order terms and protecting the financial interests of the business.
The quantity on the invoice is outside the acceptable tolerance but has been approved, while the unit price remains within tolerance.
The system accepts the approved quantity and the unit price as per the invoice and processes the transaction accordingly.
Purchase Order (PO):
Quantity: 150 units
Unit Price: $12.00 per unit
Total Amount: $1,800.00
Invoice Received:
Quantity: 160 units (outside tolerance of 6.67% but approved)
Unit Price: $12.00 per unit (within tolerance)
Total Amount: $1,920.00
Tolerance Levels:
Quantity Tolerance: ±5%
Unit Price Tolerance: ±2%
Since the quantity (160 units) exceeds the acceptable tolerance limit but has been approved, and the unit price ($12.00) is within the acceptable range, the system will:
Accept the Approved Quantity: The system acknowledges that the quantity has been approved despite being outside the normal tolerance range.
Accept the Unit Price: The unit price of $12.00 per unit is within the acceptable tolerance, so it is accepted as invoiced.
Process the Transaction: The system calculates the total amount using the approved quantity and unit price:
Total Amount = Quantity × Unit Price
Total Amount = 160 units × $12.00 per unit = $1,920.00
Finalize the Invoice: The system processes the invoice with the total amount of $1,920.00, reflecting the approved quantity and accepted unit price.
This approach allows the system to accommodate approved variances in quantity while ensuring the unit price remains within the expected range, facilitating smooth transaction processing.
Handles discrepancies in tax amounts between the invoice and purchase order.
The system adjusts the tax lines according to the approved tax rates and amounts, ensuring compliance with applicable tax regulations.
Purchase Order (PO):
Subtotal Amount: $10,000.00
Tax Rate: 8%
Expected Tax Amount: $800.00
Total Amount with Tax: $10,800.00
Invoice Received:
Subtotal Amount: $10,000.00
Tax Rate: 10% (discrepancy)
Invoiced Tax Amount: $1,000.00
Total Amount with Tax: $11,000.00
Since the tax rate on the invoice (10%) differs from the expected tax rate (8%) and is not approved, the system will:
Reject the Invoiced Tax Rate: The system does not accept the 10% tax rate because it does not match the approved rate in the purchase order.
Adjust the Tax Rate: The system adjusts the tax rate to match the approved rate from the purchase order.
Adjusted Tax Rate = 8% (from PO)
Recalculate the Tax Amount: The system recalculates the tax amount based on the adjusted tax rate:
Corrected Tax Amount = Subtotal Amount × Adjusted Tax Rate
Corrected Tax Amount = $10,000.00 × 8% = $800.00
Recalculate the Total Amount: The system recalculates the total amount including tax:
Corrected Total Amount with Tax = Subtotal Amount + Corrected Tax Amount
Corrected Total Amount with Tax = $10,000.00 + $800.00 = $10,800.00
Generate a Credit Note: The system generates a credit note to correct the overcharged tax:
Credit Note Amount = Original Invoice Tax Amount - Corrected Tax Amount
Credit Note Amount = $1,000.00 - $800.00 = $200.00
Process the Invoice: The system processes the invoice with the corrected tax amount of $800.00 and the total amount of $10,800.00, issuing a credit note for the $200.00 tax discrepancy.
This approach ensures that the invoice tax is consistent with the purchase order and complies with applicable tax regulations, preventing overpayment and ensuring accuracy in financial records.
The charge per unit on the invoice is within the acceptable tolerance range compared to the purchase order.
The system accepts the charge per unit as invoiced and processes the transaction without adjustments.
Purchase Order (PO):
Charge Per Unit: $5.00
Quantity: 500 units
Total Charge Amount: $2,500.00
Invoice Received:
Charge Per Unit: $5.10 (within tolerance of 2%)
Quantity: 500 units
Total Charge Amount: $2,550.00
Tolerance Levels:
Charge Per Unit Tolerance: ±3%
Since the charge per unit ($5.10) is within the acceptable tolerance range of 3% compared to the purchase order, the system will:
Accept the Charge Per Unit: The system accepts the invoiced charge per unit of $5.10 as it falls within the defined tolerance limit.
Process the Transaction: The system processes the invoice with the total charge amount based on the invoiced charge per unit and quantity:
Total Charge Amount = Quantity × Charge Per Unit
Total Charge Amount = 500 units × $5.10 = $2,550.00
Finalize the Invoice: The system processes the transaction without any adjustments, accepting the invoice as it is.
This approach allows the system to accommodate minor acceptable variances in charges, ensuring smooth and efficient processing of transactions without unnecessary rejections or delays.
The header charge per unit is outside tolerance and has not been approved.
The system adjusts the header charge to match the purchase order, processing the transaction accordingly, and generating any necessary notes.
Purchase Order (PO):
Header Charge Per Unit: $4.00
Quantity: 1,500 units
Total Header Charge Amount: $6,000.00
Invoice Received:
Header Charge Per Unit: $5.00 (outside tolerance of 25%, rejected)
Quantity: 1,500 units
Total Header Charge Amount: $7,500.00
Tolerance Levels:
Header Charge Per Unit Tolerance: ±5%
Since the header charge per unit ($5.00) exceeds the acceptable tolerance range of 5% and has not been approved, the system will:
Reject the Invoiced Header Charge Per Unit: The system does not accept the invoiced header charge per unit of $5.00 due to the variance exceeding the tolerance limit.
Adjust the Header Charge Per Unit: The system adjusts the charge per unit to match the original purchase order or the approved charge per unit:
Adjusted Header Charge Per Unit = $4.00 (from PO)
Recalculate the Total Header Charge Amount: The system recalculates the total charge amount based on the adjusted charge per unit:
Corrected Total Header Charge Amount = Quantity × Adjusted Header Charge Per Unit
Corrected Total Header Charge Amount = 1,500 units × $4.00 = $6,000.00
Generate a Credit Note: Since the original invoice total was higher than the corrected total, the system generates a credit note for the overcharged amount:
Credit Note Amount = Original Invoice Total - Corrected Total Header Charge Amount
Credit Note Amount = $7,500.00 - $6,000.00 = $1,500.00
Process the Invoice: The system processes the invoice with the corrected total charge amount of $6,000.00 and issues a credit note for $1,500.00 to account for the overcharged amount.
This approach ensures that the transaction is aligned with the original terms of the purchase order, maintaining accurate financial processing while correcting any overcharges.
The quantity on the invoice exceeds the acceptable range (positive) and is rejected, but the unit price is within tolerance.
The system adjusts the quantity to the approved level, maintaining the unit price, and processes the transaction. Any excess quantity is rejected and not invoiced.
Purchase Order (PO):
Quantity: 100 units
Unit Price: $8.00 per unit
Total Amount: $800.00
Invoice Received:
Quantity: 110 units (outside tolerance of 10%, rejected)
Unit Price: $8.00 per unit (within tolerance)
Total Amount: $880.00
Tolerance Levels:
Quantity Tolerance: ±5%
Unit Price Tolerance: ±2%
Since the quantity (110 units) exceeds the acceptable tolerance limit (positive variance of 10%) and is not approved, but the unit price ($8.00) is within tolerance, the system will:
Reject the Excess Quantity: The system rejects the quantity that exceeds the approved tolerance level.
Adjust the Quantity: The system adjusts the quantity to match the approved level specified in the purchase order.
Approved Quantity = 100 units (from PO)
Maintain the Unit Price: The unit price of $8.00 per unit is within tolerance and remains unchanged.
Recalculate the Total Amount: The system calculates the total amount using the approved quantity and the accepted unit price:
Total Amount = Approved Quantity × Unit Price
Total Amount = 100 units × $8.00 per unit = $800.00
Process the Invoice: The system processes the invoice with the adjusted total amount of $800.00, reflecting only the approved quantity and unit price. The excess quantity of 10 units is rejected and not invoiced.
This approach ensures that the invoiced amount aligns with the agreed terms in the purchase order, even when the supplier attempts to invoice for an excess quantity.