Differences Within Tolerance Limits in SAP FICO

Differences within tolerance limits are posted automatically. The system can either adjust the cash discount amount or post the difference to a separate gain or loss account. When setting up your tolerance limits, you also specify how the system should post the differences.

You can set:

• The maximum amount for adjusting the cash discount. The outstanding difference is added to or subtracted from the cash discount.
• The maximum amounts or percentages for automatically posting any difference to a separate gain or loss account if the cash discount cannot be adjusted.

Tolerance limits are defined separately for users and business partners. The system checks both limits when clearing open items. The lowest limit always has priority.

For one of your customers you set a maximum amount of two USD for adjusting the cash discount amount when a payment difference occurs. For the accounting clerk that processes this customer account, however, you set a maximum amount of one USD. If differences occur when this clerk clears items from this customer account, the system can adjust the cash discount amount only up to a maximum of one USD.

Settings you make for tolerance limits are valid in the currency of your company code (local currency). The currency is always displayed when defining limits.

Defining Tolerance Limits

You set tolerance limits separately for your users and your business partners:

For the cash discount adjustment, you can set separate maximum amounts of permitted payment differences per gain and loss (see 1 in figure below).

Only if a cash discount posting exists and the cash discount amount allows the system to make an adjustment can immaterial differences be cleared by adjusting the cash discount.

If the payment difference cannot be cleared by adjusting the cash discount, the system posts it to a separate gain or loss account. For posting the difference to a separate gain or loss account, you also set a maximum amount for your users and your business partners. The lowest limit has priority in clearing procedures. You can set an absolute amount (see 2) or a percentage (see 3). The lowest limit has priority here as well.

To use only absolute amounts or percentages, simply enter greater values for the other limits. Limits can be set per gain and loss.

Grouping Business Partners

If you want to use the same tolerances for several customers or vendors, you can group them together using the tolerance group code. You simply define the tolerances under a tolerance group code and then enter that code in the master records of the customers or vendors that should be assigned those tolerances.

You can also define tolerances without specifying a tolerance group for them by leaving the tolerance group field empty. These tolerances will then affect all customers or vendors that are not assigned any tolerance group in their master records, that is, the field in the master record is left blank.

By grouping your business partners under tolerance group codes, you can assign different tolerances to different groups of business partners. For instance, all your major customers could be assigned the same tolerances, which are more lenient than those assigned to new customers. Extraordinary business partners could be assigned special tolerances that are defined under a separate code.

Tolerance groups are defined per company code. This ensures that all tolerance settings you make are effective in the company code’s currency. It also lets each company define its own tolerances for the same business partners.

When defining tolerances, you can also make other settings that facilitate open item processing. See Facilities for Processing Open Items. For more information about setting tolerances, see the Define tolerances (vendors) or Define tolerance group for users activity in Customizing for Financial Accounting.