GoodBooks ERP provides advanced option to manage , track and account variances in material management.
When materials are bought or sold, there can be variance due to many reasons including

. Quality of material not as per agreed specifications
. Quantity of material not correctly supplied and billed (Shortage/Excess bill)
. Difference in Rate and charges
. Rejection or rework of materials
. Others

The following scenario illustrate the reason for Variance and Debit/Credit Note

1. Order placed for Item-A  for 10 numbers with Vendor V  at the rate of 50 per quantity

2. Vendor V has supplied 10 Nos along with bill for the same.

3. But when material is received, it is found that there are 3 quantity partially damaged (Re-workable)
and 1 number totally damaged (Reject).  6 numbers  are accepted (Good Quantity)

The inward will be entered as below

 Item                   Doc. Qty       Received Qty     Good Qty    Rework Qty     Rejected  Qty      
Item-A                     10                          10                             6                             3
4. In normal circumstances, 6 accepted quantity will be taken to bill passing, 3 quantity will be
sent for rework and 1 number will be sent as rejection.

In this case, though the vendor has sent us a bill for 10 numbers, we will clear only for 6 numbers.

5. However, if the vendor’s bill has to be accounted as such (10 numbers) due to various reasons
(Duty and tax matching, simpler accounting statement etc),  then we can do so with Variance and Debit/
Credit Notes.   So, in the given scenario, we need to “pass” the bill for 10 number though we have
received only 6 accepted quantity.   The following process can be followed.

Option A   :  Manual variance entry

1  Make a variance entry for 4 quantity (3 rework and 1 reject) for which we want to
“pass” excess bill

2  Make necessary Debit Note for amount equaling to 4 quantity

3  Bill passing now can be done for 10 number (6 Accepted + 4 variance)

Option B   :  Automatic Variance and Debit Note

1  Make Bill passing quantity as Variance allowed in Configuration (Administration option)

2  While passing the bill, system will automatically load and show 6 as the quantity (accepted)
change the quantity to 10 (as required)  and calculate and save the bill.

3. While saving, system automatically understands that there is 4 quantity excess you want to
pass and internally generates the required Variance record for 4 numbers and raises  the
Debit note for the 4 numbers.

In both the options the required effect (Bill passing for 10 and debiting for 4 quantity) is done.

Variance tracking can be done for

. Quantity Variance   (Billed Quantity vs Accepted Quantity)
. Rate Variance       (Order Rate vs Billed Rate)
. Charges Variance    (Order charges vs Billed Charges)
. Quality Variance    (Order/Specified quality/specication vs supplied quality)
. Others