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sourceDocument: Xanadu Finance and Supply Chain
sourceDocumentLink: https://www.servicenow.com/docs/r/xanadu/source-to-pay-operations

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ft:publication_title :

    - Xanadu Finance and Supply Chain

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# Tolerance Rules and Variances for invoices

# Tolerance Rules and Variances for invoices {#ariaid-title1}

* Release version: Xanadu
* 
* Updated August 1, 2024
* 
* ![](https://www.servicenow.com/docs/portal-asset/ico-clock) 1 minute to read

Setting
tolerance rules
to determine the permissible amount of variance applied on
an
invoice's total value enables you to avoid payment delays and make
payment processing more efficient.

You can customize tolerance rules that
compare
invoices with defined tolerance percentages and
values. If the
differential is
within the limit, the invoice is considered valid for payment. If it is greater than the tolerance limit, exceptions are raised.

## Tolerance types {#tolerance-rules-and-variance__section_s2m_fts_xyb}

Accounts Payable Operations supports the following tolerance types:

* Line amount tolerance: Avoid payment delays by defining the acceptable difference between the expected and actual total amount for specific items or services of the invoice.
* Line quantity tolerance: Ensure easy payment processing by defining the acceptable range between the expected and actual quantities of items or services listed on an invoice. This is a line level of tolerance.
* Line unit price tolerance: Avoid small discrepancies from impacting payment processing and supplier relations by establishing a tolerance range for the difference between the purchase order line unit price and the actual price of an invoice. This is a line level of tolerance.
* Overbilling amount tolerance: Avoid overbilling between an invoice and the corresponding purchase order by setting a tolerance range for the difference between the actual amount value and the expected amount. This is a header level tolerance.
* Over tax amount and under tax amount variances: Confirm smooth payment processing by defining an acceptable range between the supplier-provided tax and system-calculated tax amounts that indicates acceptable minor differences within the defined tolerance range.  
  Note:  
  If the tax amount variance for a tax line is within the tolerance range, then supplier tax amount is copied over to the final tax amount field by default.
{#tolerance-rules-and-variance__ul_bj2_gts_xyb}
* **[Define a custom invoice tolerance type](https://www.servicenow.com/docs/DoiXsJ3BS6EIpCb_5ekz9w)**   
  Define a custom invoice tolerance type that you can use in an exception definition to make payment processing more efficient.
* **[Associate invoice tolerance type with invoice exception definition](https://www.servicenow.com/docs/nIJNxNxp3QWxEu2v_BZZeg)**   
  Define a new tolerance type and associate it with an invoice exception definition.
* **[Define an invoice tolerance rule](https://www.servicenow.com/docs/SjuZENDfjmbTHHntIgfcPw)**   
  Configure an invoice tolerance rule definition for a tolerance type to be applied to invoices matching the invoice filter's conditions.
* **[View tolerance form](https://www.servicenow.com/docs/9KwcAE52A6GkAmJOJYXmDA)**   
  View the invoice processing cases with exceptions in the tolerance form with Tolerance details at header level and Variance details at line level.

**Related concepts**   

* [Work with invoices](https://www.servicenow.com/docs/W8NXW5DaKJ_fvnAdGeKtnw "Invoices are generated for a payment against a purchase order. The Accounts Payable Specialist [sn_ap_apm.accounts_payable_specialist] can access all the invoices and take required actions to process the invoices in Source-to-Pay Workspace.")
* [Invoice processing cases](https://www.servicenow.com/docs/qGzVWM41vhN9OaYw1wWx4A "Typically, Accounts Payable Operations integration with Document Intelligence automatically creates the invoice processing case by extracting data from the invoice that you receive as an attachment via email. However, the Accounts Payable Specialist may need to manually create a new invoice or update details of a partially created invoice in situations where the automated invoice creation process encounters issues or is not available.")
* [Invoice exceptions](https://www.servicenow.com/docs/hjSTHhSznZNSptTKqUEHHg "Invoice exceptions are issues that are identified in an invoice during invoice processing.")
* [Invoice approvals](https://www.servicenow.com/docs/PG1sid3U56ZYMH8iYfsNQA "Invoices with the No exceptions found status are eligible for approval.")  
**Related tasks**   

* [View invoice documents in the Source-to-Pay Workspace](https://www.servicenow.com/docs/4PR94rhrPZeH_xDz_Ucqjw "View the invoice documents directly in the Source-to-Pay Workspace using Document Viewer without having to download them.")