The Entire Amount of the Vendor Bill is Set as the Variance instead of the Difference between the Item Receipt and the Vendor Bill Created from the Purchase Order when Post Vendor Bill Variances> Match Bill To Receipt = True

Answer:

When the Match Bill To Receipt is enabled in the line items of a Purchase Order; the system requires matching of Item Receipts against Vendor Bills in order to identify the amount of variance postings.

The matching of Item Receipts against Vendor Bills when the latter transaction is created is an automated process in the system.   However, the system is unable to perform this process if the Vendor Bill is created prior to the Item Receipts causing the system to think that the Vendor Bills do not have matching Item Receipts and would therefore post a variance equal to the entire amount of the Vendor Bill

An alternate solution is to manually match each Item Receipt against each Vendor Bill under by selecting the former transaction under the Receipts column for each line item added in the Vendor Bill

This limitation is discussed under Enhancement 228446: Purchase Order = Match Bill To Receipt: Ability of the system to appropriately match and update the Receipts column with Item Receipt information for Vendor Bills that were recorded prior to the creation of the Item Receipt.