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Tolerance Limit

Learn how to set up Tolerance Limits to control re-approvals after document revisions. Apply different conditions to make your approval process easier and reduce unnecessary workflow interruptions.

TABLE OF CONTENTS

What Is the Tolerance Limit?

Tolerance Limit (TL) is a configuration setting that determines the conditions under which document revisions will trigger a re-approval. 

TLs are applied across all document types and can be configured with various conditions. It allows you to control changes in document amounts, ensuring approvals are only required when significant revisions occur. 

Tolerance Limits can also be applied to matching discrepancies between documents when the Apply TL Rules to Matching setting is enabled.

💡Please note: TL works based on the document’s Net Total amount. TLs only apply when the document total increases. If the total decreases beyond the set limit, no re-approval will be triggered.

How to Set Up Tolerance Limits

You can set up TL in two ways:

Option 1: General Setup for All Suppliers

  1. Open the Configuration page → Basic Settings → Approval tab.
  2. Click Add Tolerance Limit.
  3. Choose a Condition from the available options: Any, Less or equal, From, or From to. Learn more here.
  4. Choose the Limit Type (% or company currency).
  5. Enter the Tolerance Limit % (the percentage variation allowed without triggering re-approval) or number (if company currency is used as a limit type).
  6. Add multiple conditions by pressing the Add Tolerance Limit button (if needed).
  7. Click the checkmark and Save buttons.

💡Please note: These settings apply to all document types activated in your company.

Option 2: Setup For Individual Suppliers

💡Please note: Individual supplier settings take precedence over the general Tolerance Limit in Basic Settings when it comes to matching (if the Apply the Limit Rules to Matching setting is enabled). TLs for individual suppliers do not affect the re-approval process.

You can set up the TL for individual suppliers in two ways: 

  1. One-by-one in Supplier Profiles:
    • On the Supplier Management page, select the supplier you want to edit.
    • Open the Main Info tab.
    • Press the checkmark icon next to the Special Tolerance Limit option.
    • Set the Tolerance Limit Condition, select the Limit Type (percentage or company currency), and enter the required Tolerance Limit amount.
    • Press the Save icon to record the changes.
  2.   In bulk via the Update suppliers template.

In Bulk

How to Enable Tolerance Limit for Matching

By default, TL applies only to re-approval. To make tolerance limits affect matching rules as well, follow these steps:

    1. Go to Configuration → Basic Settings → Approval.
    2. Enable the “Apply the Limit Rules to Matching” checkbox.
    3. Click Save to apply the changes.

Once enabled, the TL in Basic Settings will apply both to re-approval and matching.

💡Please note: 

  • The individual supplier TL settings override the general TL settings when it comes to matching (if the TL is configured both in Basic Settings and in the Supplier Profile).
  • The individual tolerance limit in supplier profiles only affects matching and never impacts re-approval. 
  • If any item is added or removed from the document, it will always trigger the matching process, even if the document total remains within the set TL, unless you enable the Adding New Items Without Matching functionality.

Precoro automatically matches invoices against POs to ensure procurement accuracy. However, if you want to enable matching for receipts as well, you need to activate the “Match with Purchase Order” setting. Learn more here.

How to Edit or Delete Tolerance Limits

To edit the TL settings: 

  1. Go to the Basic Settings → Approval tab.
  2. Click the Edit icon next to the existing TL. 
  3. Modify the condition, Tolerance Limit amount, or type as needed.
  4. Click Save to record the changes.

To delete the TL settings: 

  1. Go to the Basic Settings → Approval tab.
  2. Click the Delete icon next to the existing TL. 
  3. Click Save to record the changes.

How Tolerance Limit Works in Documents

Here’s how the Tolerance Limit works in documents under different conditions:

Option 1: When the “From” Condition Is Enabled

This condition allows you to set a minimum threshold for the document total.
The Tolerance Limit applies only if the document total exceeds the specified amount.

For example, if TL is 2% and the document total is $3,000, the allowed increase is up to $60 (2% of $3000). If the document total increases from $1 to $59, the TL will be applied, and re-approval will not be triggered. An increase of $60 or more will trigger the re-approval process.

Option 2: When the “From to” Condition Is Enabled

The “From to” condition allows you to define a range for applying TL.

The Tolerance Limit applies only if the document total falls within the set range.

For example, if you set from $3,000 to $6,000, the TL will apply for documents with total amounts between $3001 and $5999.

If your TL is 2% and the document total is $5,000, the allowed increase is up to $100 (2% of $5,000). If the document total increases from $1 to $99, the TL will be applied, and re-approval will not be triggered. If you increase the document total to $100 or more, the re-approval will be triggered.

Option 3:  When the “Any” Condition Is Enabled

With this condition, the Tolerance Limit applies to all documents, regardless of their total.

For example, if TL is 2% and the document total is $8,000, the allowed increase is up to $160 (2% of $8,000). If the document total increases from $1 to $159, the TL will be applied, and re-approval will not be triggered. An increase of $160 or more will trigger the re-approval process.

Tolerance Limit and Matching Process: Example

When the “Apply the Limit Rules to Matching” setting is activated, Precoro also tracks deviations between:

  • A Purchase Order created by you
  • An Invoice submitted by the Supplier (through the Supplier Portal)

💡Please note: To submit invoices through Precoro, suppliers must have the Supplier Portal access. Find more details here.

You will always be informed about the changes the supplier has put in the invoice. If the Supplier exceeds the set TL, both the invoice and the related PO will be sent for matching.

For example, when you set the supplier’s TL to 5%, and your PO has a Net Total of $5,000, the allowed deviation is up to $250 (5% of 5000).
If the supplier changes the total by $250 or less, the document will be approved without matching.
If the changed total exceeds $250, the PO and Invoice/Receipt will be sent for matching.

To trigger document matching for invoices or receipts with any discrepancies, set the Tolerance Limit to 0. This way, even the smallest difference between the PO and the supplier's invoice will prompt the matching process.

You can track any changes to items, prices, or quantities directly in the document. 

Track

Learn more about the Matching Process here.

What Changes Affect Tolerance Limits

The following changes to the document can impact the total amount:

  • Changes to the price of items
  • Changes in the quantity of goods
  • Adjustments to taxes (addition, modification, or deletion)
  • Changes in exchange rates
  • Adding or removing items

If the total amount remains within the set Tolerance Limits after these changes, re-approval will not be triggered after the revision confirmation.

Tolerance Limit Analytics

You can track TL analytics in:

Supplier Management filters Filters-1

 
Supplier Management list Supplier Management

 
Reports Reports-1

 
Supplier Revision history Supplier Revision History