Table of Contents
| Content | Shortcut Link |
| What Is a Price Claim | Jump to Content |
| Ideal Supply Chain Process vs One Involving a PPV | Jump to Content |
| How Do I Know if my Invoice has a PPV | Jump to Content |
| Common Reasons for PPV | Jump to Content |
What Is a Price Claim?
A price claim, also known as Purchase Price Variance (PPV), occurs when a vendor submits an invoice with a unit cost higher than what was confirmed in the purchase order (PO). This discrepancy delays payment processing and requires resolution before funds can be released.
Ideal Supply Chain Process vs. One Involving a PPV
- The vendor confirms the PO.
- The products are delivered to the fulfillment center.
- An invoice is submitted matching the agreed-upon PO cost.
- If the invoice matches the PO, payment is processed without delay.
Example:
- PO: 50 units × $2.25 = $112.50
- Invoice: 50 units × $2.25 = $112.50 → ✔ Payment Sent
If the invoice reflects a higher cost than the PO:
Example:
- PO: 50 units × $2.25 = $112.50
- Invoice: 50 units × $2.95 = $147.50 → ✖ PPV Created
In this case:
- Payment is delayed.
- A PPV is automatically issued.
- The vendor is notified via email and Vendor Central.
How Do I Know if my Invoice has a PPV?
A PPV is automatically triggered when the invoiced unit cost differs from the PO.
You’ll be notified via:
- Vendor Central
- Remittance Advice
If a PPV is issued, you’ll see a notification in your Vendor Central account. You can view details and dispute the claim if necessary.
Common Reasons for PPVs
If you update your product cost after the PO is confirmed — or invoice using an updated cost without formally submitting the update — a PPV will occur.
Example:
Confirmed PO: 12 yellow bears @ $5.50 each
Invoice: 12 yellow bears @ $5.75 each → ✖ PPV Issued
Solution:
Contact your Vendor Manager (VM) to validate and process cost updates correctly.
When the unit cost multiplied by the case quantity results in rounding discrepancies, a PPV may be triggered.
Example:
- Case pack: 12 units, total cost: $33.31
- Unit cost: $2.775833
- Incorrect rounding:
- $2.78 × 12 = $33.36 ✖
- $2.77 × 12 = $33.24 ✖
Solution:
Ensure that case costs are divisible evenly by the number of items per case to avoid rounding issues.
A switcheroo occurs when the shipped item differs from what was listed on the invoice or confirmed on the PO.
Example
- PO: 12 red mugs
- Shipped: 12 orange mugs
- Invoice: 12 red mugs → ✖ Mismatch → PPV Issued
If an item is shipped without a corresponding PO confirmation, the system cannot validate the cost — resulting in a PPV.
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