The purchase price difference is the deviation between the actual purchase price of a material and the reference price selected for comparison. Purchasing the same material at a different price does not always mean a purchasing error; If it is not known what condition the difference is caused by, cost control cannot be done.
Based on which price is the price difference calculated?
What you compare the actual purchase price to changes the meaning of the report. The type of comparison should be clearly stated rather than a single “old price” statement within the company.
Planned price
Unit price taken into cost account in the period budget.
Standard cost price
The control price used in the product cost for a certain period.
negotiated price
The price determined for the quantity and period in the supplier contract.
Previous realized price
This alone can be misleading if the same conditions are not maintained.
Actual purchase price − Reference price
Unit price difference × Quantity received
These two formulas only show the deviation in the purchase price. Transportation, financing, quality loss, waiting and overstock effects are not evaluated separately. actual purchase cost It will not be found.
Why is the Same Material Purchased at Different Prices?
Market and raw material exchange
The market price of inputs such as metal, plastic, leather, fabric or chemicals may change between the quote date and the order date.
Exchange rate and rate date
If the type of exchange rate, date and exchange rate fixing condition used in foreign currency offers are not the same, the TL equivalent will differ.
Order quantity and level
Quantity discount may be advantageous; However, purchasing more than needed may create inventory carrying, space and cash costs.
Maturity and payment method
The cash price and the 30, 60 or 90 day forward price are not the same. If the maturity difference is not shown separately, the reason for the price increase cannot be seen.
Shipping and delivery method
Whether shipping, insurance, packaging, unloading or customs expense is included in the price directly affects the quotes.
Technical Specifications and Quality
The tolerance, quality class, wastage rate or document scope of the material purchased under the same name may be different. Material that looks cheap may turn out to be more expensive in production.
Delivery time and urgent order
A late-opened purchase order may result in the use of express shipping, small batch, or more expensive alternative suppliers.
Contract and price validity
Framework contract, periodic fixed price, price update clause or offer validity period produce different results.
The Lowest Price Is Not Always the Best Offer for the Same Material
The three offers below are prepared on the assumption that the business needs 1,000 kg of material. The cards are decision examples; financing and quality costs must be calculated with the company’s real data.
98 TL/kg
- advance payment
- Excluding freight: 4 TL/kg
- 1,000 kg order possible
- Estimated delivery: 10 days
- 2% rejection in last three acceptances
Decision note: The apparent price is low; The comparison price changes when shipping and quality loss are added.
102 TL/kg
- 45 days maturity
- Including shipping
- 1,000 kg order possible
- Estimated delivery: 4 days
- No rejections in the last three acceptances
Decision note: Unit price is higher; Maturity, delivery and quality conditions should be evaluated in the same cost calculation.
95 TL/kg
- 30‑day term
- Including shipping
- Minimum order: 3,000 kg
- Estimated delivery: 14 days
- New supplier; no quality history
Decision note: Offers the lowest price; However, it cannot be compared with the same quantity due to excess stock and quality uncertainty.
Align Conditions Before Comparing Quotes
How is the Price Difference Reflected in the Product Cost?
The difference in raw material price is carried to the product cost as much as the usage amount in the bill of materials. However, simply changing the price on the purchase order is not enough; Actual consumption, waste, exchange rate and additional expenses should be evaluated in the same cost period.
Material difference
The difference between the actual purchase price and the reference price used in the cost.
Exchange rate difference
The effect of the exchange rate method on the order, goods acceptance and invoice dates.
Additional expense
Shipping, insurance, customs, unloading and other expenses allocated to the material.
loss of use
Increased consumption per unit product due to quality issues, excess waste or non‑conformities.
To see how the material difference is distributed to the product review the product cost calculation guide and examine it.
What Data Should Be Kept Together in ERP?
Material and specification
Material code, quality class, unit of measurement, tolerance and alternative material information.
Offer conditions
Supplier, offer date, validity period, currency, exchange rate method, discount and price level.
Order Terms
Order quantity, minimum quantity, delivery date, maturity, delivery method and shipping scope.
Actual results
Goods acceptance quantity, actual price, additional expense, quality result, return, delay and invoice information.
To evaluate the supplier on outcomes other than price supplier performance guide; To see purchase confirmation and periodic agreement structure strategic purchasing letter use it.
Frequently Asked Questions
Is the purchase price difference always negative?
No. A positive difference may occur if the actual price is below the reference price. However, it should also be checked whether the low price creates quality, quantity or inventory costs.
Is the last purchase price the correct reference?
It is only meaningful if the amount, currency, exchange rate, maturity, delivery and technical specifications are the same. If conditions have changed, the reason for the difference must be isolated.
Should the exchange rate difference be tracked separately from the purchase price difference?
Yes. If management wants to see the effect of supplier price increases and foreign exchange movements separately, the exchange rate date and conversion method should be recorded separately.
Why might the cheapest offer not be selected?
Minimum order quantity, advance payment, shipping, loss of quality or late delivery may increase the total cost. The decision should be made based on offers compared with the same conditions.
When comparing order price with delivery and invoice terms order tracking scope examine; Verify the details of the price difference report with an actual purchase example.
Track the price difference with its cause and cost impact
Offer, order, goods acceptance, quality and invoice data KG Tedarik Check out how you can manage the same purchasing process with .