The Tolerance Rate (TR) is a deviation between a Purchase Order and an Invoice created by a Supplier. The Precoro system matches Invoices against Purchase Orders to verify the procurement accuracy.
Basically, the TR is a permissible percentage of deviation from the amount between the Purchase Order created by you and sent to the Supplier and the Invoice to your PO created by the Supplier.
You will always be up-to-date with the changes the Supplier has put in the Invoice. If the Supplier exceeds the set TR, 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. More on this here.
Follow this link to learn more about How to Set Up the Tolerance Rate for Specific Suppliers.
To individually set the TR, open the Supplier card and put in the acceptable Tolerance Rate % for you.
Set 0 in the Tolerance Rate field if you want to trigger document Matching for Invoices with any discrepancies.
Please also note that if you have added a new Item to the Invoice, the Matching will always be triggered, even if the document total remains within the set TR.
The Tolerance Rate % is calculated based on the Net Total sum of the document.
For example, you set the TR in Supplier to 5%. This means that you allow any sum deviation between your PO document and the Supplier’s Invoice 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.
