LIV tolerance for price variance from PO to LIV

Question

Hi Friends,
I am finding difficulty in setting up the tolerance key for price variance from PO value to invoice value. Suppose if PO price is $100 then system should allow upto $105 with out blocking means with percentage of 5%. If it exceeds 5% system should block the invoice.
Please suggest the tolerance key to use and if any other settings required.
Thanks...
Best Regards

Answer 1

Hi,
Following is the SAP help on the Tolerance settings for Invoice. Check the config and decide what is best for you (from your brief explanation it looks like AP and PP may be relevant fro your case)
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Set Tolerance Limits
    In this step, you specify the tolerance limits for each tolerance key
    for each company code.
    When processing an invoice, the R/3 System checks each item for
    variances between the invoice and the purchase order or goods receipt.
    The different types of variances are defined in tolerance keys.
    The system uses the following tolerance keys to check for variances:
    o   AN: Amount for item without order reference
        If you activate the item amount check, the system checks every line
        item in an invoice with no order reference against the absolute
        upper limit defined.
    o   AP: Amount for item with order reference
        If you activate the item amount check, the system checks specific
        line items in an invoice with order reference against the absolute
        upper limit defined. Which invoice items are checked depends on how
        you configure the item amount check.
    o   BD: Form small differences automatically
        The system checks the balance of the invoice against the absolute
        upper limit defined. If the upper limit is not exceeded, the system
        automatically creates a posting line called Expense/Income from
        Small Differences, making the balance zero and allowing the system
        to post the document.
    o   BR: Percentage OPUn variance (IR before GR)
        The system calculates the percentage variance between the following
        ratios: quantity invoiced in order price quantity units : quantity
        invoiced in order units and quantity ordered in order price quantity
        units : quantity ordered in order units. The system compares the
        variance with the upper and lower percentage tolerance limits.
    o   BW: Percentage OPUn variance (GR before IR)
        The system calculates the percentage variance between the following
        ratios: quantity invoiced in order price quantity units: quantity
        invoiced in order units and goods receipt quantity in order price
        quantity units : goods receipt quantity in order units. The system
    compares the variance with the upper and lower percentage limits
    defined.
o   DQ: Exceed amount: quantity variance
    If a goods receipt has been defined for an order item and a goods
    receipt has already been posted, the system multiplies the net order
    price by (quantity invoiced - (total quantity delivered - total
    quantity invoiced)).
    If no goods receipt has been defined, the system multiplies the net
    order price by (quantity invoiced - (quantity ordered - total
    quantity invoiced)).
    The system compares the outcome with the absolute upper and lower
    limits defined.
    This allows relatively high quantity variances for invoice items for
    small amounts, but only small quantity variances for invoice items
    for larger amounts.
    You can also configure percentage limits for the quantity variance
    check. In this case, the system calculates the percentage variance
    from the expected quantity, irrespective of the order price, and
    compares the outcome with the percentage limits configured.
    The system also carries out a quantity variance check for planned
    delivery costs.
o   DW: Quantity variance when GR quantity = zero
    If a goods receipt is defined for an order item but none has as yet
    been posted, the system multiplies the net order price by (quantity
    invoiced + total quantity invoiced so far).
    The system then compares the outcome with the absolute upper
    tolerance limit defined.
    If you have not maintained tolerance key DW for your company code,
    the system blocks an invoice for which no goods receipt has been
    posted yet. If you want to prevent this block, then set the
    tolerance limits for your company code for tolerance key DW to Do
    not check.
o   KW: Variance from condition value
    The system calculates the amount by which each delivery costs item
    varies from the product of quantity invoiced * planned delivery
    costs/ planned quantity. It compares the variance with the upper and
    lower limits defined (absolute limits and percentage limits).
o   LA: Amount of blanket purchase order
        The system determines the number of days by which the invoice is
        outside the planned time interval. If the posting date of the
        invoice is before the validity period, the system calculates the
        number of days between the posting date and the start of the
        validity period. If the posting date of the invoice is after the
        validity period, the system calculates the number of days between
        the posting date and the end of the validity period. The system
        compares the number of days with the with the absolute upper limit
        defined.
    o   PP: Price variance
        The system determines by how much each invoice item varies from the
        product of quantity invoiced * order price. It then compares the
        variance with the upper and lower limits defined (absolute limits
        and percentage limits).
        When posting a subsequent debit/credit, the system first checks if a
        price check has been defined for subsequent debits/credits. If so,
        the system calculates the difference between (value of subsequent
        debit/credit + value invoiced so far) / quantity invoiced so far *
        quantity to be debited/credited and the product of the quantity to
        be debited/credited * order price and compares this with the upper
        and lower tolerance limits (absolute limits and percentage limits).
    o   PS: Price variance: estimated price
        If the price in an order item is marked as an estimated price, for
        this item, the system calculates the difference between the invoice
        value and the product of quantity invoiced * order price and
        compares the variance with the upper and lower tolerance limits
        defined (absolute limits and percentage limits).
        When posting a subsequent debit/credit, the system first checks
        whether a price check has been defined for subsequent
        debits/credits, If so, the system calculates the difference between
        (value of subsequent debit/credit + value invoiced so far) /
        quantity invoiced so far * quantity to be debited/credited and the
        product quantity to be debited/credited * order price. It then
        compares the variance with the upper and lower tolerance limits
        defined (absolute limits and percentage limits).
    o   ST: Date variance (value x days)
        The system calculates for each item the product of amount *
        (scheduled delivery date - date invoice entered) and compares this
        product with the absolute upper limit defined. This allows
        relatively high schedule variances for invoice items for small
        amounts, but only small schedule variances for invoice items for
        large amounts.
    o   VP: Moving average price variance
        When a stock posting line is created as a result of an invoice item,
        the system calculates the new moving average price that results from
        the posting. It compares the percentage variance of the new moving
        average price to the old price using the percentage tolerance limits
        defined.
    Variances are allowed within predefined tolerance limits. If a variance
    exceeds a tolerance limit, however, the system issues a message
    informing the user. If an upper limit (except with BD and VP) is
    exceeded, the invoice is blocked for payment when you post it. You must
    then release the invoice in a separate step. If the tolerance limit for
    BD is breached, the system cannot post the invoice.
    Note that if you set all limits for a tolerance key to Do not check, the
    system does not check that tolerance limit. Therefore any variance would
    be accepted. This does not make sense particularly in the case of the
    tolerance key Form small differences automatically.
    Activities
    Configure the tolerance limits for the individual tolerance keys.
                 Lower limit             Upper limit
                 Absolute    Percentage  Absolute    Percentage
     AN          -           -           X           -
     AP          -           -           X           -
     BD          X           -           X           -
     BR          -           X           -           X
     BW          -           X           -           X
     DQ          -           -           X           -
     DW          -           -           X           -
     KW          X           X           X           X
     LA          -           -           X           X
     LD          X           -           X           -
     PP          X           X           X           X
     PS          X           X           X           X
     ST          -           -           X           -
     VP          -           X           -           X
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Best Regards,
Siva