OPEX Tolerances

OPEX uses a set of Tolerance Codes to add in the matching of Purchase Order Lines.

The tolerance for a Purchase Order Line is calculated as the difference between the PO Line Invoiced Unit Cost and the PO Line Issued Unit Cost.

Tolerance Levels are set by the OPEX Administrator and are unlikely to require changing.

Tolerance levels are designed to highlight a discrepancy in the approved PO costs and the Invoiced Costs. An additional financial approval stage will ensure people are aware of the differences.

Where a price variation is approved ( See PO Financial Approval)  and the invoice is subsequently completed the pricing used by OPEX for that item will change to reflect the modified unit costs.

There are three levels. Each are described as a net amount and a percentage.

You can see in the example below how they may be set.

In this case if we had a PO Line that differed in terms of unit costs by more then 5% or £500 it would be assigned a tolerance level of Orange.

If the variance was less then 5% or £500 it would be assigned a tolerance level of Green.

If you decide that you don't want three levels you can have a two level model by assigning the same values for the Green and Orange Tolerances.

The Red Tolerance level is designed to highlight a severe problem with a Purchase Order Line and should not be changed.

In the standard OPEX, PO Lines that have a tolerance level will be highlighted by the colours Red, Orange and Green respectively.  These will vary on a customer by customer basis.

An invoice is given a notional tolerance which is calculated as the highest tolerance level of the lines associated with it. Therefore if you have two lines on an invoice, one is Green and one is Orange, the Invoice would be considered Orange.

Invoice Completion and Tolerances

For an Invoice to be completed three conditions must exist:

  1. The total of the Invoice (less Delivery Charges) must equal the total of the lines matched to that Invoice.

  2. If there are lines that have a Tolerance these lines must be approved, by a Stores Administrator (See separate note on the financial approval process which may differ depending on the Tolerance Level).

  3. The Tolerance Level of the Invoice (and consequently of any matched lines) cannot be Red.