This article is for reference only. The Classic Item Category Form was deprecated in October 2023. To learn about Item Category Variance Caps in the New Item Category form, click here. 


Item Category variance caps are set acceptable variances for item costs within an Item Category. These variance caps are set on the Item Category 1, 2, and 3 records and will follow the set variance cap hierarchy, which is defined below.


On AP Invoice forms, a threshold variance warning will appear to alert the User of this variance. By hovering over the item row, Users can even review the details of the variance in order to make the appropriate changes. If no changes are necessary, the User will need to confirm the variance before saving, completing, or approving the new invoice.


Item Category Variance Cap Hierarchy


If variance caps are set for Item Category 1, 2, and 3's, then it is important to refer to this cap hierarchy to learn when a set variance cap trumps another in reporting.


Variance cap hierarchy for an Item Category:

  1.  Category 3 
  2.  Category 2 
  3.  Category 1 


A report will first look at the Item Category 3's set variance cap before looking at the Item Category 2's set variance cap, and so on. If there is no set variance cap for an Item Category, then the system will defer to the next ascending Item Category's set variance.


Prerequisites


 

To set up Item Category variance caps, first navigate to the correct Item Category record. On this record, enter the set positive variance cap allowed for this category in the 'Acceptable Variance %' field and then save the record.

  • Note: If no variance cap is desired, ensure to leave this field blank. If a '0' is entered, the system will recognize it as a 0% acceptable variance cap.



Once variance caps are set, they will be displayed in the Item Categories listing.


Variance Cap Alerts on AP Invoices


Variance cap alerts will appear on AP Invoices to notify the User that there was a cost increase by the Vendor or an incorrect entry. If an incorrect amount was entered, ensure to verify that the each amount is the correct cost for this Inventory UofM 1 before saving, completing, or approving the invoice.



Smart Ops AP Invoice



Once an AP Invoice is marked as 'Completed', Reviewers will be able to view a threshold violation from the 'Alerts' tab of the AP Invoice.



Then, the Reviewer can navigate back to the 'Details' tab to review the threshold variance's details by hovering over the item and viewing its variance details in a tool tip that appears. These details are based on the price per Inventory UofM 1, where the cost per Inventory UofM 1 on the last completed/approved invoice for the Location, or the 'Was' amount, is compared to the cost per Inventory UofM 1 on this invoice, or the 'Now' amount. The variance will then be listed as a percentage.

  • Note: The 'Was' amount is hyperlinked to its corresponding AP Invoice, which is at least one day prior to the date of the current invoice. If multiple invoices were completed/approved for the 'last' invoice date, then the system will pick an invoice and use its details for this formula.



If an AP Invoice is saved, completed, or approved while still being outside the set Item Category variance cap, then a warning message will appear where the User will need to confirm that they have reviewed these discrepancies and understand that they are outside of the Item Category variance cap.



Classic AP Invoice



Two alerts will appear on an AP Invoice as soon as it is saved. The first is listed at the top of the AP Invoice and the second highlights the item that has caused the threshold variance.



Hovering over the highlighted item will display a tool tip that lists the details of the threshold variance, which details the price per Inventory UofM 1. The cost per Inventory UofM 1 on the last completed/approved invoice for the Location, or the 'Was' amount, is compared to the cost per Inventory UofM 1 on this invoice, or the 'Now' amount. The variance will then be listed as a percentage.

  • Note: The 'Was' amount is hyperlinked to its corresponding AP Invoice, which is at least one day prior to the date of the current invoice. If multiple invoices were completed/approved for the 'last' invoice date, then the system will pick an invoice and use its details for this formula.



If an AP Invoice is saved, completed, or approved while still being outside the set Item Category variance cap, then a warning message will appear where the User will need to confirm that they have reviewed these discrepancies and understand that they are outside of the Item Category variance cap.