What is the best practice regarding the tolerance amount for GRIR? What dollar amounts do most companies set up for over/under invoice payment amount vs. the amount of goods received?


Tolerances vary by company, and may be based on a dollar amount or a percentage, or in the case of GRIR, count. In the case of PO/invoice variances, TAPN has surveyed on the point and found that roughly half of companies establish tolerances using a combination of percent and max dollar variance allowed, while roughly one-quarter use dollar amount and one-quarter use percent.  We have not surveyed specifically on GRIR tolerances, but expect it to be similar. It’s a business decision made by the company, and factors involved include industry, types of goods, average invoice amount, and the cost it takes to research discrepancies (it is, after all, about not spending a dollar to chase fifty cents).

When one of our experts worked in a construction materials company, she says their policy was to accept invoices “as is” on the theory that, in their business, sometimes the goods received were under and other times over, and that it evened out, though she says “down in the yard, there were more unders than overs.”  So you have to know your business and your costs and decide what is an acceptable tolerance.

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