Question:
- What is a users Variance Limit?
- What is a Purchasers Variance Limit?
Answer:
The Purchase Price Variance Limit is a threshold that determines how much control a Purchaser has when editing the cost of items within the Procurement stage.
For example, if Pat has a variance limit of $50, and he is editing an item that costs $100 per piece, he will only be able to increase the value up to $150. This example references a dollar value variance, but the variance can also be set up using percentage limits as well.
If a percentage Price Variance Limit is set up, and the Purchaser has a limit of 10%, they can only edit orders up to 10% of the value of the item. In this case, if the cost of the item is $25.00 the user is only able to add or remove up to $2.50.
Tips!
- Worth noting is that the variance limit only affects the Price field within an item, and not the Quantity. This means that the cost of Order Items can still be dramatically increased if a Purchaser increases the Quantity, as there is no limit to the Quantity
- It's important to be aware of the prices and types of items that your company purchases when you are determining whether you will set up a percentage or a cash value limit. Either option will create greater limitations or freedom depending on the cost of the items.
- How to set or edit a Purchaser's price edit variance limit
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