How to spot rising purchase costs (price variance)
Web
Updated Aug 2026
Supplier prices drift up quietly, one delivery at a time, until your margins are gone. Purchase Price Variance compares what you actually paid over a period against each product’s reference cost (its running weighted-average cost), so price creep shows up as a number — over-spend, under-spend and net variance, per product — before it eats your profit.
Step by step
- Open the reportWeb: Purchasing → Purchase Price Variance. Pick the date range (defaults to this year).
- Read per-product varianceEach product shows quantity, actual cost, reference cost, the unit and percentage variance, and the variance value.
- Act on the outliersUse the over-spend list to renegotiate, switch supplier (compare via quotes), or reprice your own products.
Frequently asked questions
How do I know if a supplier’s prices are rising?
The Purchase Price Variance report compares actual paid cost against each product’s reference (average) cost over a period, surfacing over-spend and under-spend per product.
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