---
title: "Invoice price variance"
description: "What is invoice price variance (IPV)? The gap between a supplier's invoice price and the agreed PO price. Learn why it gets its own account, with an example."
url: https://1flux.ai/glossary/invoice-price-variance
last_updated: 2026-10-10
---

[Accounting](https://1flux.ai/glossary#accounting)

# Invoice price variance

What is invoice price variance, and why does it deserve its own account?

Glossary Updated 10 October 2026

Definition

Invoice price variance (IPV) is the difference between the price on a supplier's invoice and the price agreed on the purchase order for the same goods.

## What is invoice price variance used for?

Stock is usually valued at the order price when it’s received. If the invoice then charges more or less, the difference has to go somewhere: to an IPV account, or back into stock. Keeping it in its own account makes overcharges visible and gives purchasing a reason to query the supplier. The formula is (invoice price − PO price) × invoiced quantity.

An invoice above the PO price

Example

- PO price

  EUR 75 × 100 units

- Invoice price

  EUR 77 × 100 units

IPV: (77 − 75) × 100

EUR 200

The buyer is asked to explain it or claim a credit.

It’s checked as part of matching invoices to orders and receipts; see [three-way match](https://1flux.ai/glossary/three-way-match).

In 1flux

When a purchase invoice price differs from the order, 1flux requires a reason and posts the difference to an Invoice price variance account. [See 1flux Purchasing](https://1flux.ai/products/purchasing)

Related

## Keep exploring

### [Purchase price variance](https://1flux.ai/glossary/purchase-price-variance)

The gap between standard cost and the price actually paid.

### [Three-way match](https://1flux.ai/glossary/three-way-match)

Checking a supplier invoice against the PO and the receipt.

### [Purchase invoice](https://1flux.ai/glossary/purchase-invoice)

A supplier's bill as recorded in your books.

### [Purchasing](https://1flux.ai/products/purchasing)

Requisitions, quotes, LPOs, two-step receiving and receipt-based invoices in one flow.

Last updated 10 October 2026