Invoice Payment Exceeds Allowed Variance

Issue

When attempting to process an invoice against a Purchase Order, Microix may display a message indicating that the payment exceeds the allowed variance.

For example:

The variance is more than 10% and is not allowed.

This can commonly occur when additional costs, such as freight or shipping, are added to the invoice but were not included on the original Purchase Order.

Cause

Microix uses Global Setting GSID 414 to control how much a payment can exceed the approved document amount.

For example, if GSID 414 is set to 10%, an invoice payment cannot exceed the approved Purchase Order amount by more than 10%.

Resolution

There are several ways to manage this requirement.

Option 1 - Increase the Allowed Variance

If your organization wants to allow payments to exceed the approved Purchase Order by a greater percentage, increase the value in:

Maintenance > Global Settings > GSID 414

For example, increasing the setting from 10% to 15% would allow a larger difference between the approved Purchase Order and the final payment.

Option 2 - Include Estimated Freight or Shipping

Going forward, requesters can include an estimated freight or shipping cost when creating the original request.

Once the actual shipping cost is known, the amount can be adjusted. Including an estimate on the original request may help keep the final invoice amount within the allowed variance.

Option 3 - Update the Purchase Order

The Purchase Order can also be edited to include freight, shipping, or other additional costs that were unknown when the original request was submitted.

If the Purchase Order is changed by an amount that exceeds the allowed variance, the Purchase Order will need to be re-routed through the approval process before the invoice can be processed.

Example

A Purchase Order is approved for $1,000 and GSID 414 is set to 10%.

The maximum payment allowed without updating the Purchase Order would be $1,100.

If an invoice is entered for $1,125 because additional freight was added, the invoice exceeds the allowed variance and Microix will prevent the payment from being processed.

You can either:

• Increase the percentage allowed by GSID 414, or
• Update the Purchase Order to include the additional freight or other costs and re-route it for approval when required.

Recommendation

If freight or shipping charges are commonly added after a Purchase Order is created, consider including an estimated amount on the original request. This can reduce the number of Purchase Orders that need to be modified and re-approved when the final invoice is received.