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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Purchase Variance Entr...
Small and medium business | Business Central, N...
Suggested answer

Purchase Variance Entry Not Posting

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Posted on by Dharmesh 140

Dear Team,

We have noticed that the Purchase Variance entry is not getting posted in our system, and request your guidance on the same.

Test Case:

>Item Price on Purchase Order Line: Rs.100

>Posted Purchase Receipt Line: Rs.100

>At the time of Purchase Invoice, Vendor sent Invoice with new Price: Rs.150

The system allows us to change Unit Price in Purchase Invoice Line and post the Invoice, but the difference amount of Rs.50 is not being posted as Purchase Variance. Total Rs.150 is posted in Purchase Account now

Kindly guide us on how this difference amount should be posted under the Purchase Variance

Categories:
Dynamics 365 Business Central
I have the same question (0)
  • Suggested answer
    Alex A Profile Picture
    Alex A 2,562 on at
    Purchase Variance Entry Not Posting
    In Dynamics 365 Business Central, the behavior you described depends primarily on the item's Costing Method (found on the item's card under the Costing tab).
     
    The Purchase Account (from General Posting Setup) always receives the invoiced amount (Rs.150), regardless of costing method—this reflects the actual liability to the vendor.
     
    But the Rs.50 difference can only be reflected in the Value Entries after you run the Adjust Cost - Item Entries batch job.
     - This process updates the inventory value and posts the variance to the appropriate accounts.
     
    - Always run Adjust Cost - Item Entries after posting invoices with price differences.
    - Optionally, enable automatic cost adjustment in Inventory Setup if you want this to happen routinely.
  • Suggested answer
    Rishabh Kanaskar Profile Picture
    Rishabh Kanaskar 3,413 on at
    Purchase Variance Entry Not Posting
    Hi,
     
    In Business Central, Purchase Variance only posts automatically if the item’s inventory valuation method is set to Standard Cost. With FIFO or Average Cost, BC posts the invoice directly to the Purchase account and does not create a separate variance entry.
     
    To have the Rs.50 variance posted separately:
    > Check the item’s Inventory Posting Group and Inventory Valuation Method.
    > If using Standard Cost, ensure the Allow Invoice Price Variance setting is enabled in Purchases & Payables Setup.
    > For non-standard cost items, consider creating a manual adjustment journal or using Invoice Price Variance functionality via journals/extensions.
     
    In your case, since the item posts Rs.150 directly, it indicates the item is not Standard Costed. Only switching to Standard Cost or using manual adjustment will show a separate variance.
     
    Thanks
    Rishabh
  • Suggested answer
    Valentin Castravet Profile Picture
    Valentin Castravet 29,203 Super User 2025 Season 2 on at
    Purchase Variance Entry Not Posting
    What setup do you have in the Inventory Setup Page? Do you have Automatic Cost Adjustment set to Always?
     

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