A Bill Variance journal entry is created to account for discrepancies between the expected cost of goods (from the purchase order) and the actual cost from the supplier. The process involves two key posting transactions. First, the Item Receipt records the inventory at the expected cost. Second, the Vendor Bill is entered with the actual cost. If the cost on the vendor bill differs from the cost on the item receipt, the system generates a variance journal entry at the time the bill is saved to account for this difference.

B. purchase order: This is a non-posting commitment that establishes the expected price but does not directly cause the variance journal entry.

C. bill payment: This transaction settles an existing accounts payable liability and does not relate to the cost variance of the goods received.

D. purchase requisition: This is an internal, non-posting request to purchase goods and has no direct impact on the general ledger.

1. Oracle NetSuite SuiteAnswers

Answer ID: 38681

"Vendor Bill Variances." This document states

"When you use the Vendor Bill Variances feature

NetSuite can generate variance postings for vendor bills that have a price or exchange rate difference from the purchase order. These variances post when the bill is created." This confirms the Vendor Bill is a primary trigger.

2. Oracle NetSuite SuiteAnswers

Answer ID: 9919

"Definitions of Variances." This article defines Bill Price Variance: "The difference between the price of an item on a purchase order and the price of an item on a vendor bill." This establishes the relationship between the receipt (which uses the PO price) and the bill

identifying them as the two components causing the variance.

3. Oracle NetSuite Help Center

2023.2

"Accounting for Vendor Bill Variances." The documentation details the accounting impact: "When the vendor bill is for a different amount than the purchase order

a variance is created... The variance is posted as part of the vendor bill transaction." This explicitly links the variance posting to the Vendor Bill transaction

which is compared against the value established by the Item Receipt.