Price Tolerance Percentage and Price Tolerance Amount Functionality in Purchase Orders – R12.2
Understanding the Price Tolerance Amount functionality in Oracle Purchasing.
Exercise 1: Price Tolerance (%) options in Purchasing.
Step 1: Raise a requisition for an item (Test 123) with price as 100.
Navigation: Requisitions >Requisitions.
Approve the Requisition.
Step 2: Auto Create the Requisition into Purchase Order.
Select the Requisition line by checking the box and click on Automatic option at the bottom and say OK.
Now the PO will be auto created as below.
Now try to change the line price (Say 120 here from 100) and approve.
We will get an error message saying as “Price does not fall within tolerance.”
Step 3: Check Purchasing Options.
Navigation: Setup >Organizations >Purchasing Options.
Note that we have price tolerance of 10% and Enforce Price tolerance is checked.
“This is the percentage by which the Autocreated purchase order line price cannot exceed the requisition line price. If you select Enforce Price Tolerance, you can create, but not approve, purchase orders for which this tolerance is exceeded. There is no restriction on how much a price can decrease.”
Now Make the both fields blank as below and save.
Now you will be able to approve the PO, no matter how much is the price.
Exercise 2: Price Tolerance (%) options at Item levels.
Make the Price tolerance at purchasing level as below.
Now create a requisition with price as 100.
Auto Create the Requisition line into PO.
Try to change the price in the Purchase order as 105 as it falls within the tolerance and try approving.
System throws the below error message again.
To overcome the error, Go To Organization Items and query the Item.
Check the Price tolerance % and make it to null as below and save.
Now if you try to approve the system still throws the error again.
Go to master Item form and query the Item and make sure the tolerance is cleared and save.
You can now able to approve the Purchase Order.
There are 3 levels of check for the above functional error to look out for:
Organization Item level.
Master Item level.
Exercise 3: Exercise on Price Tolerance Amount.
Follow the same process of creating a requisition and auto create with 100 as its price as in the above exercises.
Change the price to 175 and try to approve the purchase order.
The system throws a error saying “Total amount does not fall within amount tolerance”.
Now look into the Purchasing Options and there is a tolerance of 50 given in the Price tolerance amount field and that’s the reason the system is giving error as we have exceeded the tolerance.
Because earlier the PO Total Amount was 200 and now that has been changed to 350 which is above 50, means we can only change the amount with in 50 as per the tolerance we have given.
Now clear the tolerance amount and uncheck the enforce button and save.
Now you can be able to approve the purchase Order.