Enhanced interface

Match tolerances overview

When the details of purchase orders are validated against PO purchase invoices, you ensure that your organization is properly paying for what was ordered.

With match tolerances enabled and configured, Sage Intacct automatically compares the quantities and unit prices that appear on converted transactions. For example, if your workflow is to convert purchase orders to PO purchase invoices, Intacct compares the quantities and unit prices between the 2 transactions.

The entry is posted only if the quantity and price match or fall within the allowed tolerance range. If the quantity or price exceeds the tolerance range, Sage Intacct flags the transaction as an exception. The purchasing manager can then review and either correct the lines that have an exception, or decide that the exception is okay and override it.

Benefits

Tolerance matching provides these benefits for your business controls:

Reduces the risk of fraud and financial loss by preventing the reimbursement of unauthorized purchases.
Provides a way for Accounts payable or other departments in charge of finances to manage financial risk and control company spend.
Identifies frequent mistakes on receipts and PO purchase invoices that can be a sign of a broader business issue, and might indicate that it’s time to consider other suppliers.

How it works

When you enable match tolerances on the Configure Purchasing page, you specify the transaction definitions for the transactions you want to validate, and set the percent tolerance for the quantity and unit price. If any line in the draft or converted transaction is higher or lower than the specified percent tolerance, for quantity or unit price, the system flags the transaction with an exception.

Users with the appropriate permissions can edit transactions with exceptions to either correct the variance or to accept the variance and allow the transaction to go through the rest of the transaction workflow.

When a flagged transaction is overridden to accept the tolerance and it posts to Accounts Payable, an AP supplier invoice is created. If there's a price variance between the source transaction and the converted to transaction, the variance is either posted to the Match tolerance GL account or according to the transaction definition settings.

Companies most often use match tolerances to verify that the quantity and unit price details on the purchase order, PO receipt, and PO purchase invoice agree. Sage Intacct automatically validates the quantity and unit price as you convert from one transaction to the next, using the information in the source transaction for comparison in the converted to transaction.

Example

Assume that your workflow is to convert purchase orders to PO receipts to PO purchase invoices. You are willing to accept these differences when transactions are converted.

Purchase order to PO receipt. A 10% difference on quantity, but no difference in the unit price.
PO receipt to PO purchase invoice. A 10% difference on unit price, but no difference in the quantity.

The setup on the Configure Purchasing page would look like the following:

The Enable match tolerances checkbox is selected.
The appropriate PO receipt transaction definition is selected and the Quantity tolerance percent is 10 and the Price tolerance percent is 0.
The appropriate PO purchase invoice transaction definition is selected and the Quantity tolerance percent is 0 and the Price tolerance percent is 10.

Now, assume that you order desks for one of your office buildings. Here's what happens when you go through the transaction workflow:

Purchase order

You create a purchase order for 50 desks at a unit price of $100.

PO receipt

You receive the desks but there are only 48 desks in the shipment.
You convert the purchase order to a PO receipt, changing the quantity to 48 and leaving the unit price as $100. Sage Intacct automatically calculates the variances.
PO receipt example
Transaction Item Quantity Unit price Extended price Quantity variance Quantity variance % Price variance Price variance%
Purchase order Desk 50 100 5000
PO receipt Desk 48 100 4800 -2 - 4% 0 0%
The PO receipt is posted because the quantity tolerance and the price tolerance are not exceeded. The quantity variance is 4%, which is below the 10% tolerance. The price variance is 0%, which meets the 0% tolerance.
You call the supplier to let them know that you only received 48 desks instead of 50 and that you don't want the other 2 desks.

PO receipt example
Transaction	Item	Quantity	Unit price	Extended price	Quantity variance	Quantity variance %	Price variance	Price variance%
Purchase order	Desk	50	100	5000
PO receipt	Desk	48	100	4800	-2	- 4%	0	0%

PO purchase invoice

The supplier sends you a bill for 48 desks at a unit price of $115.
You investigate why the unit price is $115 instead of $100. Apparently there was a mix up. The supplier had originally misquoted the unit price. You decide to keep the desks even though you will pay more than you expected.

You convert the PO receipt to a PO purchase invoice, leaving the quantity as 48 and changing the unit price to $115. Sage Intacct automatically calculates the tolerances.

PO receipt to vendor invoice conversion example
Transaction	Item	Quantity	Unit price	Extended price	Quantity variance	Quantity variance %	Price variance	Price variance %
Purchase receipt	Desk	48	100	4800
PO purchase invoice	Desk	48	115	5520	0	0%	$15.00	15%

The PO purchase invoice is not posted and an AP supplier invoice in AP is not created because the 10% price tolerance is exceeded. The unit price variance is 15%. The PO purchase invoice is saved and its state is changed to Exception so that it's flagged.
To complete the workflow, you edit the PO purchase invoice to override the exception. When you select Override exception, the transaction is posted, and a an AP supplier invoice is created in AP.

If the supplier had said they made a mistake and the unit price was really $100, you would edit the PO purchase invoice and change the unit price to $100. The PO purchase invoice would post with no exceptions and an AP supplier invoice would be created because the price tolerance would not be exceeded.

Partial conversions

Sometimes, you might receive goods for an order in separate shipments. When you partially convert a purchase order to a PO receipt, the quantity tolerance might be negatively exceeded with too little quantity being received. This is most likely to occur on the 1st conversion. You can override the exception on the PO receipt to keep converting the purchase order. When you convert the remaining quantity, watch for additional exceptions that might get generated and need to be overridden.

Restrictions

When match tolerances is enabled, the following functionality is not supported:

Partial conversion of purchase orders with a transaction definition that's configured with Close original and create back order as the setting for partial conversion handling.
Creating transactions with a transaction definition that's listed for match tolerance validation in the Purchasing configuration as standalone transactions. The transaction definitions that are listed for validation must be configured to be converted to from appropriate source transactions.
Sending transactions with a transaction definition that's listed for match tolerance validation in the Purchasing configuration through an approval workflow. If the transaction definition has match tolerance configured, the transaction will not go through approval.
Automatic price variance posting.

In addition, avoid using smart events that are triggered when transactions are updated. Such smart events have the potential of incorrectly changing the status of a transaction from Exception to Pending.