What is tolerance limit in SAP MM-IV - Invoice Verification?

SAP Term: tolerance limit

• Component: MM-IV

• Component Name: Invoice Verification

• Description: Limit up to which invoice variances are accepted by the system without query. If the tolerance limit is exceeded, the relevant items are blocked and payment cannot be effected. The tolerance limit can be defined in Customizing for .

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• Key Concepts: 
  Tolerance limit in SAP MM-IV Invoice Verification is the maximum amount of variance that is allowed between the invoice and the purchase order. This variance is calculated by subtracting the net value of the invoice from the net value of the purchase order. If the difference is within the tolerance limit, then the invoice can be processed. 
  
  How to use it: 
  The tolerance limit can be set up in SAP MM-IV Invoice Verification by going to the Customizing menu and selecting “Define Tolerance Limits”. Here, you can enter a value for the tolerance limit and save it. This value will then be used to determine if an invoice can be processed or not. 
  
  Tips & Tricks: 
  It is important to set up a reasonable tolerance limit that is not too high or too low. If it is too high, then invoices may be processed without proper verification, which could lead to errors or fraud. If it is too low, then invoices may be rejected unnecessarily, which could lead to delays in processing. 
  
  Related Information: 
  For more information on setting up tolerance limits in SAP MM-IV Invoice Verification, please refer to the SAP Help documentation.