Skip to main content
Version: Current

Troubleshooting: Understanding and Resolving Variances

Problem​

When matching an invoice to a Purchase Order (PO), Zudello indicates a Variance, meaning there's a difference between the expected value (from the PO) and the actual value (from the invoice) for the matched items.

Understanding Variances​

Variances highlight discrepancies that may require investigation or specific approval. Zudello calculates variances primarily for Quantity-Based Matching.

  • Price Variance: Occurs when the unit_price on an invoice line differs from the unit_price on the corresponding, allocated PO line.
    • Calculated per line: Variance Amount = (Invoice Unit Price - PO Unit Price) * Allocated Quantity
    • Variance Percentage = (Variance Amount / PO Line Total Exclusive Local) * 100
  • Amount-Based Matching: Variances are typically not calculated in the same way. Discrepancies are reflected in the Remaining Amount on the PO, as the focus is on the total value allocated rather than unit prices.

Zudello displays variances using:

  • Icons: Yellow up/down arrows next to the price field indicate if the invoice price is higher or lower than the PO price. See Review Matching Icons.
  • Calculated Fields: The system stores variance_amount_json and variance_percentage_json fields on the transaction, often broken down by the related document type (e.g., purchasing_order). These can be used in Sentence conditions.

Common Causes of Variances​

  • Price Changes: The supplier charged a different price than originally quoted or ordered on the PO.
  • Data Entry/Extraction Errors: Incorrect unit_price entered manually or extracted incorrectly from the invoice or PO.
  • Incorrect Matching: The invoice line was matched to the wrong PO line, resulting in a price comparison between unrelated items.
  • Currency/Tax Issues: Although calculations use local, exclusive amounts, underlying errors in currency conversion or tax settings could potentially manifest as variances if not handled correctly earlier.

Handling Variances​

  1. Identify the Variance: Use the variance icons on the invoice lines to pinpoint which items have price discrepancies. Hover over icons for details if available.
  2. Investigate the Cause:
    • Compare the invoice line unit_price against the corresponding PO line unit_price.
    • Verify both prices against the original documents (invoice image, PO record). Was there a genuine price change from the supplier, or is it a data error in Zudello?
    • Ensure the invoice line is matched to the correct PO line.
  3. Resolve the Issue:
    • Data Error: If the price in Zudello (on the invoice or PO, if editable) is incorrect, correct the data and Save. This should recalculate the variance.
    • Incorrect Match: Unmatch the line and rematch it to the correct PO line.
    • Genuine Price Change: If the supplier charged a different price:
      • Accept Variance: If the variance is within your organisation's acceptable tolerance, proceed with the standard workflow. Sentences might be configured to allow small variances through automatically.
      • Query Supplier: Contact the supplier to understand the price difference and potentially request a credit note if incorrect.
      • Route for Approval: If the variance exceeds tolerance, your configured Sentences should route the invoice for specific variance approval (e.g., to a manager or procurement team). Follow your internal approval process.

Using Variances in Automations​

Administrators can configure Sentences to automatically handle variances:

  • Trigger: Use triggers like "When a resource status has changed" (e.g., to READY).
  • Conditions: Use conditions based on Variance Percentage (Order) or Variance Amount Local (Order).
    • Example: Variance Percentage (Order) | Greater than | 5 (for variances over 5%)
    • Example: Variance Amount Local (Order) | Less than | 10 (for variances under $10)
  • Actions:
    • Route for specific approval using "Get Approval" actions.
    • Set a specific status (e.g., VARIANCE_REVIEW).
    • Add a note indicating the variance.

Need Help?​

If you are unsure how to interpret or resolve a variance, or need help configuring variance-based automations, contact your organisation administrator or Zudello support.