Tolerance Keys at Purchase Order Level in SAP

 Tolerance Key PE:

PE tolerance key is used to check the variance between the effective price on the PO item against valuation price stored in the material master record.

 

◦Tolerance limit for system message no. 207. 

This message appears if the specified effective price exceeds the predefined tolerances when compared with the material price.

 Example:

Currently the Material ABC MAP is 2732.80 SGD , Total Stock is 2 and Value is 5,465.59 SGD

Here the material MAP is 2732.80 SGD , when create PO Item price is 1000 SGD

The waring message appear like this

Effective price is 1000.00 SGD, material price is 2,732.80 SGD

Message no. 06207

Diagnosis

The system has checked the tolerances for price variances defined in Customizing, and has already informed you of this variance in a system message.

Effective price
To be able to compare the effective price determined in the purchase order with the material price in the material master, the effective price 1000.00 SGD is converted into the base unit of measure and price unit of measure stored in the material master.

Material price
The material price 2,732.80 SGD refers to:

• The current price (for example, standard price, moving average price) in the material master, and

• The price unit in the material master

Note
If the purchase order contains a different currency, the effective price is converted into the local currency.

Example 1

A material costs $10 per piece (pc) in the purchase order.
A material price of $5 per 10 pc is stored in the material master.

Because the price in the material master is given per 10 pc, the effective price is also calculated for 10 pc.

The price in the purchase order is first converted into the base unit of measure for the material in the material master, then into the price unit in the material master.

The effective price for 10 pc is therefore:
$10/10 pc * (no conversion into base unit) * 10 pc = $10

The effective price is $10, the material price is $5 (per 10 pc).

Example 2

A material costs $10 per carton in the purchase order (1 carton = 10 pc).
A material price of $4.50 per 5 pc is stored in the material master. Because the price is given for 5 pc in the material master, the effective price is calculated for 5 pc.

The price in the purchase order is first converted into the base unit of measure for the material in the material master, then into the price unit in the material master.

The effective price per 5 pc is therefore:
$10/1 Carton * 1 Carton/10 pc * 5 pc = $5

 

Tolerance Key SE:

 SE is defined as checking variance for cash discount value.

◦Tolerance limit for system message no. 231. This is a warning message, which appears when the specified cash discount percentage exceeds the predefined tolerances.