TABLE OF CONTENTS
- How to Set Up
- How It Works in Documents
- What Changes Tolerance Limits Include
- How to Apply the Limit Rules to Matching
A Tolerance Limit (TL) is a setting that helps you set the conditions under which a re-approval will not be triggered after a document revision. Additionally, you can activate the Limit Rules to Matching functionality for it to track both the re-approval after document revision and matching.
Tolerance Limits are set for all document types and can have several conditions.
With this feature, you can limit or remove the approvals when a revision has been made.
TL works based on the document’s Net Total amount.
How to Set Up
Limits work only for increasing the total of the document. You can reduce the total to more than the set limit, and the re-approval will not be triggered.
You can set up Tolerance Limits in two ways, follow these steps:
Common Setup for All Suppliers
1. Open the Configuration page → Basic Settings → Approval tab.
The Tolerance Limits setting allows you to set limits for changes in the document amount that will not trigger the re-approval.
2. Add the Tolerance Limit:
- Press the Add Tolerance Limit button.
- Choose a Condition. The following conditions are available: Any, Less or equal, From, and From to.
- Enter the Tolerance Limit % (variation that allows you to set the amount for not triggering the re-approval).
- Press the Checkmark and Save buttons.
These settings will be applied to all document types that are turned on in your company.
You can add multiple conditions by pressing the Add Tolerance Limit button.
Setup for Individual Suppliers
You can set it up for the necessary Suppliers in two ways:
1. One-by-one in specific Suppliers’ Profiles.
Open the Tolerance Limit tab in the Supplier profile. Here, you can set the condition, select the limit type, and enter the needed amount, just as in the configurations in the Basic Settings.
In the Limit Type field you can select either:
- The percentage of the amount “%”;
- The main company currency (e.g., USD) — in that case, the matching will be triggered if the document amount increases by the amount specified in the condition (applies to the Receipt matching as well).
2. In bulk using the Update Suppliers template:
Remember that the individual Tolerance Limit settings in the Supplier’s profile will have higher priority and will be applied over the Tolerance Limit in the Basic Settings.
How to Edit or Delete the TL
You can Edit the existing TL in the Basic Settings → Approval tab by clicking the pencil icon next to the settings. You can change both the Condition and the Tolerance Limit %.
To Delete the previously created TL press the corresponding icon next to the settings and press Save.
How It Works in Documents
Example with Condition From:
The Condition From lets you set the threshold for the document total. So by selecting From 3000, we would apply the TL to those documents whose total in which are greater than 3000. If the total in the document equals 2999, the TL will not be applied.
Setting the percent of TL lets us control the variation of what amount the re-approval will be triggered. The Tolerance Limit % is calculated from the document Total Sum. If my document has a 3000 Total, setting it for 2% will allow a maximum increase in the total of up to 60 (2% from 3000 = 60).
So, if your users increase the total price from 1 to 59, the document will not be sent for re-approval. On the other hand, if they increase the total starting from 60 and any higher value, the re-approval will be triggered, and the document will undergo your set workflow.
Example with Condition From to:
The Condition From to lets you set the threshold for the document total setting the minimal and maximal amount where the approval may get triggered again. By selecting From 3000 To 6000, we would apply the TL to those documents whose total is greater than 3000 and less than 6000. If the total in the document equals 2999 or 6001, the TL will not be applied.
Setting the percent of TL lets us control the variation of what amount the re-approval will be triggered. The Tolerance Limit % is calculated from the document Total Sum. If my document’s total is 5000, then setting the TL for 2% will allow a maximum increase in the total of up to 100 (2% from 5000 = 100).
So, if your users increase the total price from 1 to 99, the document will not be sent for re-approval. On the other hand, if they increase the total starting from 100 or higher, the re-approval will be triggered, and the document will undergo your set workflow.
Example with Condition Any:
The Condition Any sets the threshold for any documents' total sum without minimum or maximum sums. Your set TL will be applied to all documents, regardless of the total.
Setting the percent of TL lets us control the variation of what amount the re-approval will be triggered. The Tolerance Limit % is calculated from the document Total Sum. If my document’s total is 8000, then setting the TL for 2% will allow a maximum increase in the total of up to 160 (2% from 8000 = 160).
So, if your users increase the total price from 1 to 159, the document will not be sent for re-approval. On the other hand, if they increase the total starting from 160 or higher, the re-approval will be triggered, and the document will undergo your set workflow.
What Changes Tolerance Limits Include
You can make the following changes that affect the amount of the document:
- Changes to the price of items
- Changes in the number of goods
- Changes in taxes (adding, editing, deleting)
- Changes in Exchange Rates
- Adding and removing items.
If the amount of the document remains within limits with these changes, the re-approval will not be triggered after the revision confirmation.
How to Apply the Limit Rules to Matching
You can set the Tolerance Limits in Basic settings for all your Suppliers at once instead of assigning limits individually in the Supplier Profiles.
However, you still can assign the Tolerance Limits individually in the Supplier’s profile if your process requires it.
Please note that the Tolerance Rate was renamed in the Supplier’s profile to Tolerance Limit.
For the TL to start affecting matching rules as well you need to enable the Apply the Limit Rules to Matching checkbox in the Configuration → Basic Settings → Approval.
With that setting activated the set Tolerance Limit will affect both re-approval after the document revision and matching.
The process for setting up Conditions remains unchanged, but remember that with the new setting enabled the set conditions will also determine the matching triggering.
The individual Tolerance Limt settings in the Supplier’s profile will have higher priority and will be applied over the Tolerance Limit in the Basic Settings.
So, if the Net Total of the document exceeds the set TL level in Basic Settings it will both undergo the matching and the re-approval:
The Tolerance Limit with activated Matching rules also tracks deviations between a Purchase Order and an Invoice/Receipt created by a Supplier. The Precoro system matches documents against Purchase Orders to verify the procurement accuracy.
Basically, it tracks a permissible percentage of deviation from the amount between the Purchase Order created by you and sent to the Supplier and the Invoice/Receipt to your PO created by the Supplier. Please note that Precoro only automatically matches Invoices, to match the Receipts, you have to additionally activate that functionality in Basic Settings.
You will always be up-to-date with the changes the Supplier has put in the Invoice. If the Supplier exceeds the set TL, both documents will be sent for Matching.
Please see the Matching Process article to learn about its work.
To be able to send you Invoices in Precoro, your Supplier should have Supplier Portal access. Find more information about this functionality here.
To individually set the TL, open the Supplier card and put in the acceptable Tolerance Limit % for you.
Set 0 in the Tolerance Limit field if you want to trigger document Matching for Invoices/Receipts with any discrepancies.
Please also note that if you have added a new Item to the document, the Matching will always be triggered, even if the document total remains within the set TL.
The Tolerance Limit % is calculated based on the Net Total sum of the document.
For example, you set the TL in Supplier to 5%. This means that you allow any sum deviation between your PO and the Supplier’s Invoice/Receipt that equals 5% of the Net Total sum to go without triggering Matching.
If you have created the PO with a 5000 Net Total sum, then you allow sum deviation up to but not more than 250 (5% from 5000 = 250). In that case, if the Supplier tries to change the Net Total to more than 250, the documents will be sent for Matching, and the PO initiator will receive full information on the exact item lines that got changed. But if the Supplier changes the Total within the limits of 1 to 249, then the documents will get approved without any Matching process.
Detailed information regarding items, prices, and quantities that were changed will be shown directly in the document.
Tolerance Limit Analytics
You can find the Tolerance Limit analytics in:
- Supplier Management Filters
- Display in the Supplier Management List
- Accounted TL in Reports
- Displaying TL changes in the Supplier Revision History
