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Tolerance
Tolerance groups are a set of assigned authorization of users using the SAP S4HANA software. They define the limits which differences are accepted and posted to predefined accounts automatically. Tolerances can be based on amount, percentage, or debit and credit. Tolerances are used for payment differences, cash discount, and G/L account clearing. There are three types of tolerance groups: employee, general ledger account, and customer or vendor.
How G/L tolerance works:
OB57- Assign users tolerance group – Here we are creating a blank tolerance group which is assigned to user id
OBA4 –FI Tolerance group for users- Amount per document determines that the user has a privilege to post a transaction maximum up to the specified amount per document/invoice. Amount per open item pertains only to Customer/Vendor line items and not to G/L line items Percentage specified in Cash discount field determines the upper limit of discount which user is authorized to process. This permitted payment difference applies to the open item managed g/l clearing account and during Customer/Vendor payment clearing. During clearing process system considers whichever is the lowest whether the specified amount or the percentage. Cash discount adjusted field applies during customer/vendor payment clearing. Amount specified in cash discount adjustment will add to the already existing discount conditions. If the payment received is less than the supposed amount and if the difference is not more than the amount specified in this field, system consider this as additional discount and it will reflect in the g/l assigned for discount loss/gain.
OBA0-Tolerance for groups of G/L account in local currency– Here tolerance for groups of G/L account
purely for open item managed g/l clearing account. e.g.; GR/IR, payable a/c, another clearing a/c which you
want to clear manually or automatically. During clearing process system considers whichever is the lowest
whether the specified amount or the percentage. Also, system consider the lowest amount from both the
conditions specified.
Tolerance Limit – Customer or Vendor Payment
OBA3- Specification of Customer/Vendor Tolerance Group: Here for each company code, the
specifications for the tolerance groups for customers/vendors would have to be configured, which would
control the permitted payment differences in terms of either absolute amounts for gains or losses or the
permitted payment differences in terms of percentages for gains or losses and the limit till which the cash
discounts can be adjusted for gains or losses for customers/vendors
OBA4- Specification of User Tolerance Group: For each company code, the specifications for the tolerance groups for user would have to be configured, which would control. The permitted payment differences in terms of either absolute amounts for gains or losses or the permitted payment differences in terms of percentages for gains or losses and the limit till which the user is authorized to adjust the cash discounts for gains or losses
Assignment of Tolerance Group to Customer and User
Path to create tolerance group - OBA0
SPRO → Financial accounting → G/L accounts → Business transaction → Open item clearing → Clearing differences → Define tolerance group for G/L accounts.
Path to create tolerance group for vendor and customer -OBA3
SPRO → Financial accounting → Accounts payable & Accounts receivables → Business transactions → Open item clearing → Clearing difference → Define tolerances for customers and vendors.
Conclusion:
To sum up, tolerances play a crucial role in SAP S/4HANA by allowing organizations to set acceptable
variations in financial transactions and processes. These tolerances help maintain data accuracy, prevent
errors, and streamline business operations. With the advanced features and real-time capabilities of SAP
S/4HANA, managing tolerances becomes more efficient and accurate, contributing to better financial
control and decision-making. As businesses transition to this platform, understanding and effectively
utilizing tolerance settings will be vital for optimizing processes and ensuring accurate financial reporting.
