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How Do The Match Approval Level Option And Invoice Match Option Work?

1.Select one of the following options for Match Approval Level:
  • Two-Way: Purchase order and invoice quantities must match within tolerance before the corresponding invoice can be paid.
  • Three-Way: Purchase order, receipt, and invoice quantities must match within tolerance before the corresponding invoice can be paid.
  • Four-Way: Purchase order, receipt, accepted, and invoice quantities must match within tolerance before the corresponding invoice can be paid.
If you enter an item, the default value for this field comes from the item information at the organization level. If not defined there, the default comes from the item information at the master level. 
If you do not enter an item, the default is from your Purchasing Options.
See:Receiving Controls, Options, and Profiles.
   
   
2. Select an Invoice Match Option:
  • Purchase Order: Payables must match the invoice to the purchase order.
  • Receipt: Payables must match the invoice to the receipt.
Choose Receipt if you want to update exchange rate information on the receipt or if you want your accounting to use exchange rate information based on the receipt date. (If you use Periodic
Costing, you must match to the receipt to ensure accurate cost accounting.)
The Invoice Match Option defaults from the Supplier Sites window. You can change the Invoice Match
Option on the shipment until you receive against the shipment.
The Invoice Match Option and the Match Approval Level are independent options. You can
perform whichever Invoice Match Option you want regardless of the Match Approval Level.
 For example, you can set a PO to any one of the following examples:
   
#1 - PO#5049 - 2-way/Purchase Order
#2 - PO#5050 - 2-way/Receipt
#3 - PO#5051 - 3 way/Purchase Order
#4 - PO#5052 - 3 way/Receipt
   
The Invoice Match Option determines what document you can match the invoice to.  
In #2 & #4 If I do not create a Receipt for these POs and try to match the invoice to the PO, the system will error with:
   
APP-SQLAP-10655: You cannot match to this document.  You can match only to the document (purchase order or receipt) specified by the Invoice Match option on the purchase order shipment. Either match to the specified document, or update the Invoice Match option for the shipment and then complete this match.
    

The Match Approval Level determines what if any type of hold will be placed based on the Invoice Tolerance setup.
   
So let's say we create a PO like #3 PO#5051 - 3 way/Purchase Order, however, we do not receive the
PO.  In this case we will receive a qty hold because we have the PO set to 3 way matching.
'Purchase order, receipt, and invoice quantities must match within tolerance before the corresponding invoice can be paid.'

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