Vendor Bill Variances

When you enter purchase orders, receipts, and vendor bills for items that you buy, each transaction can show a quantity, price, and exchange rate for the items. If there are any discrepancies between the quantity, price, or exchange rate, a remaining value may post to the Accrued Purchases account. If you have enabled the Advanced Receiving feature, you can use the vendor bill variances process to generate journal postings to variance accounts based on the discrepancies.

For example, you enter a purchase order that shows the following:

Next, you receive the items into your warehouse. The item receipt shows the following:

Then, the vendor sends you a bill for the purchase. The bill shows the following:

Because the amounts on the receipt and vendor bill do not match, the remaining amount needs to be reconciled ($378.00 – 229.32 = $148.68).

To resolve these discrepancies, you can reconcile these differences using the Post Vendor Bill Variances page to post variance journal entries.

When you track and resolve these variances over time, the accuracy of your record-keeping improves. You are also better able to work with your vendors to ensure that billed quantities and prices are consistent with the receipt quantities and prices.

The Post Vendor Bill Variances page posts journal entries with these types of variances:

• Bill Quantity Variance – to resolve variances between quantities on bills and receipts

• Bill Price Variance – to resolve variances between the unit cost of items on bills and receipts

• Bill Exchange Rate Variance – to resolve variances between exchange rates on bills and receipts

Create variance journals at Transactions > Payables > Post Vendor Bill Variances (Administrator)