What can vary ?

1. The supplier does not have the stock now = sends it later with another purchase order to you
2. The price on the supplier invoice is not the same as the purchase order and this is not discovered until after the stock has been received

For landed cost variations to expected landed cost prices - see Landed Costing

Contents

Stock does not arrive

If a stock item does not arrive on a purchase order - count the received qty as zero = the purchase order will then be processed normally.  

The invoice will match up with the shipment

More stock arrives than expected

Count the stock that arrived - the counted will be greater than the ordered qty.  

The system will prompt if the invoice includes the additional stock - or if it was sent as free stock

Unexpected Stock items arrive

Perhaps they were ordered on a previous purchase order that was short shipped.  

Use the "Add Item" button on the stock receipt to enter the new item and qty, it will have a zero ordered qty - the invoice will be created for the counted quantity.

You will be prompted to make a choice about the "More Stock Arrived than Expected" as above.

The invoice is a different price each to the purchase order after stock has been counted and received

The invoice price variance will be allocated by the system to a control account "Purchase Price Variance" and the stock will NOT be revalued.

The supplier Charged Freight

When a supplier charges freight the costs are allocated by $ value across the goods by the system.  

Supplier freight is not known until the supplier invoice is entered and includes freight.

• The average cost is updated by averaging the freight based on line item value. 
• The average cost update is limited to the value that would have resulted if all the stock is still in the system
  • if there is less stock remaining than was received then not all the freight will be allocated and some will remain in the "Carriage In" control account

If you do not want the freight allocated or you want to allocate it using a different method then enter it as a separate invoice.

Example PO

Here is a PO with all of the above issues.

Stock count differences

Price Differences

After all changes - user will be prompted - what to do when counted different to invoiced

Price Variance Journals will be created the Creditor Invoice is created

Uses the Purchase Price Variance GL Control Account

Can view all that has happened on the Purchase Order

All linked Journals can be found from the Purchase Order

An example of the Journals created by discrepancies