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Variance – Overview

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

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July 31, 2014 @ 04:53:49Current Revision
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Unchanged: GoodBooks ERP provides advanced option to manage , track and account variances in material management.Unchanged: GoodBooks ERP provides advanced option to manage , track and account variances in material management.
Unchanged: When materials are bought or sold, there can be variance due to many reasons includingUnchanged: When materials are bought or sold, there can be variance due to many reasons including
Unchanged: . Quality of material not as per agreed specificationsUnchanged: . Quality of material not as per agreed specifications
Unchanged: . Quantity of material not correctly supplied and billed (Shortage/Excess bill)Unchanged: . Quantity of material not correctly supplied and billed (Shortage/Excess bill)
Unchanged: . Difference in Rate and chargesUnchanged: . Difference in Rate and charges
Unchanged: . Rejection or rework of materialsUnchanged: . Rejection or rework of materials
Unchanged: . OthersUnchanged: . Others
Unchanged: The following scenario illustrate the reason for Variance and Debit/Credit NoteUnchanged: The following scenario illustrate the reason for Variance and Debit/Credit Note
Unchanged: 1. Order placed for Item-A  for 10 numbers with Vendor V  at the rate of 50 per quantityUnchanged: 1. Order placed for Item-A  for 10 numbers with Vendor V  at the rate of 50 per quantity
Unchanged: 2. Vendor V has supplied 10 Nos along with bill for the same.Unchanged: 2. Vendor V has supplied 10 Nos along with bill for the same.
Unchanged: 3. But when material is received, it is found that there are 3 quantity partially damaged (Re-workable)Unchanged: 3. But when material is received, it is found that there are 3 quantity partially damaged (Re-workable)
Unchanged: and 1 number totally damaged (Reject).  6 numbers  are accepted (Good Quantity)Unchanged: and 1 number totally damaged (Reject).  6 numbers  are accepted (Good Quantity)
Unchanged: The inward will be entered as belowUnchanged: The inward will be entered as below
Unchanged: <span> </span> <strong><span style="text-decoration: underline;">Item                   Doc. Qty       Received Qty     Good Qty    Rework Qty     Rejected  Qty    </span>  </strong>Unchanged: <span> </span> <strong><span style="text-decoration: underline;">Item                   Doc. Qty       Received Qty     Good Qty    Rework Qty     Rejected  Qty    </span>  </strong>
Unchanged: Item-A                     10                          10                             6                             3Unchanged: Item-A                     10                          10                             6                             3
Unchanged: 4. In normal circumstances, 6 accepted quantity will be taken to bill passing, 3 quantity will beUnchanged: 4. In normal circumstances, 6 accepted quantity will be taken to bill passing, 3 quantity will be
Unchanged: sent for rework and 1 number will be sent as rejection.Unchanged: sent for rework and 1 number will be sent as rejection.
Unchanged: In this case, though the vendor has sent us a bill for 10 numbers, we will clear only for 6 numbers.Unchanged: In this case, though the vendor has sent us a bill for 10 numbers, we will clear only for 6 numbers.
Unchanged: 5. However, if the vendor's bill has to be accounted as such (10 numbers) due to various reasonsUnchanged: 5. However, if the vendor's bill has to be accounted as such (10 numbers) due to various reasons
Unchanged: (Duty and tax matching, simpler accounting statement etc),  then we can do so with Variance and Debit/Unchanged: (Duty and tax matching, simpler accounting statement etc),  then we can do so with Variance and Debit/
Unchanged: Credit Notes.   So, in the given scenario, we need to "pass" the bill for 10 number though we haveUnchanged: Credit Notes.   So, in the given scenario, we need to "pass" the bill for 10 number though we have
Unchanged: received only 6 accepted quantity.   The following process can be followed.Unchanged: received only 6 accepted quantity.   The following process can be followed.
Unchanged: <strong>Option A   :  Manual variance entry</strong>Unchanged: <strong>Option A   :  Manual variance entry</strong>
Unchanged: 1  Make a variance entry for 4 quantity (3 rework and 1 reject) for which we want toUnchanged: 1  Make a variance entry for 4 quantity (3 rework and 1 reject) for which we want to
Unchanged: "pass" excess billUnchanged: "pass" excess bill
Unchanged: 2  Make necessary Debit Note for amount equaling to 4 quantityUnchanged: 2  Make necessary Debit Note for amount equaling to 4 quantity
Unchanged: 3  Bill passing now can be done for 10 number (6 Accepted + 4 variance)Unchanged: 3  Bill passing now can be done for 10 number (6 Accepted + 4 variance)
Unchanged: <strong>Option B   :  Automatic Variance and Debit Note</strong>Unchanged: <strong>Option B   :  Automatic Variance and Debit Note</strong>
Unchanged: 1  Make Bill passing quantity as Variance allowed in Configuration (Administration option)Unchanged: 1  Make Bill passing quantity as Variance allowed in Configuration (Administration option)
Unchanged: 2  While passing the bill, system will automatically load and show 6 as the quantity (accepted)Unchanged: 2  While passing the bill, system will automatically load and show 6 as the quantity (accepted)
Unchanged: change the quantity to 10 (as required)  and calculate and save the bill.Unchanged: change the quantity to 10 (as required)  and calculate and save the bill.
Unchanged: 3. While saving, system automatically understands that there is 4 quantity excess you want toUnchanged: 3. While saving, system automatically understands that there is 4 quantity excess you want to
Unchanged: pass and internally generates the required Variance record for 4 numbers and raises  theUnchanged: pass and internally generates the required Variance record for 4 numbers and raises  the
Unchanged: Debit note for the 4 numbers.Unchanged: Debit note for the 4 numbers.
Unchanged: In both the options the required effect (Bill passing for 10 and debiting for 4 quantity) is done.Unchanged: In both the options the required effect (Bill passing for 10 and debiting for 4 quantity) is done.
Unchanged: Variance tracking can be done forUnchanged: Variance tracking can be done for
Unchanged: . Quantity Variance   (Billed Quantity vs Accepted Quantity)Unchanged: . Quantity Variance   (Billed Quantity vs Accepted Quantity)
Unchanged: . Rate Variance       (Order Rate vs Billed Rate)Unchanged: . Rate Variance       (Order Rate vs Billed Rate)
Unchanged: . Charges Variance    (Order charges vs Billed Charges)Unchanged: . Charges Variance    (Order charges vs Billed Charges)
Unchanged: . Quality Variance    (Order/Specified quality/specication vs supplied quality)Unchanged: . Quality Variance    (Order/Specified quality/specication vs supplied quality)
Unchanged: . OthersUnchanged: . Others

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