In AP we are seeing a high volume of invoices with Match Status = Failed due to a currency exchange rate difference between the Purchase Order (PO) and Invoice. The root of the issue is that the match is looking at the 'accounting currency' and not the 'transaction currency'. Many of our POs are confirmed 3 months to a year out (about 30%) and changes in the exchange rate from when the PO was confirmed to when the invoice is processed results in a match variance. With a large number of international currencies this cannot be managed with proper controls using a $ or % tolerance. Two options proposed: Add a configuration to set matching against 'transaction currency'. Or If using 'accounting currency' is “as designed”, enhance the Matching Details messaging so that the user can see if the match difference is due to the exchange rate and triage efficiently. Ideally a workflow could be built off of this. Impact: our AP team sends out approximately +9,000 additional workflows annually to Purchasing teams for approval that are related to currency differences that could be avoided.
Comments
There ought to be the ability to define price match tolerances by vendor/vendor group also as per the other tolerances in the system. This could be used to assist the level of difference created by FX and other reasons - as many companies want to have an overall amount limit not just at % level - but this overall amount may vary between interco and external vendors etc.
Category: Accounts Payable
I’m not sure that whether this is known:
On the AP matching setting, there is one parameter Match price totals. It provides several options.
- For Percentage, it compares the transaction currency.
- For Amount, it compares the accounting currency.
If Percentage is choosen, the exchange rate difference will not result in matching failure.
Just want to make sure that, this is something Microsoft didn’t document well, or current functionality cannot fulfill other business requirements.
Category: Accounts Payable
In case you have a discrepancy in transaction currency it is still needs to be translated to accounting one.
The root cause of the issue is that when comparing PO vs Invoice PO is translated by the PO accounting date and the invoice based on the invoice date. This only happens for Price total but not for price.
The proper solution would be to translate both by the rate as of Invoice date. Please remember that currently you can't specify limits by currency.
Category: Accounts Payable
I understand the reason that it works this way but agree that it should not fail matching. If vendor shipped according to PO, then the invoice should match. Nobody can control currency exchange rates differences - this is usually handled via companies' hedging policies to minimize fx risk.
Category: Accounts Payable
Administrator on 4/21/2022 9:17:29 AM
I’m not sure that whether this is known:
On the AP matching setting, there is one parameter Match price totals. It provides several options.
For Percentage, it compares the transaction currency.
For Amount, it compares the accounting currency.
If Percentage is choosen, the exchange rate difference will not result in matching failure.
Just want to make sure that, this is something Microsoft didn’t document well, or current functionality cannot fulfill other business requirements.