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What is the purpose of the "Price Difference Account" ? (PPV)

Geoff Kimpton
on 8/24/15, 4:08 PM 3,734 views

In V8, Sales > Products > Accounting

What is the purpose of "price difference account"?

Logically, it would be gross profit but that is a basic function of accounts software which suggests that it is more or at least different in some way?

No mention of it in documentation, this forum or a Udemy course I purchased (which seems to be for an older version of Odoo!)

It seems that this may be a feature which would be unneccisary for my sole trader business.

So, the remaining question is can I leave the "price difference account" field blank or would this cause other problems?

Geoff Kimpton
on 8/26/15, 7:33 AM
Ray Carnes
On 8/24/15, 5:05 PM

This field is defined in the Anglo Saxon module.

The help (when you hover over the field label) is "This account will be used to value price difference between purchase price and cost price."

If a Purchase Order shows an item is $25 but the Invoice is for $26 then $1 X <number of items> is charged to this account, since the warehouse has already received $25 x <number of items> and the corresponding entry on Invoicing needs to balance with it.

James White
On 8/19/17, 2:50 PM

Thanks @Ray.  That almost made it work for me....  but I am an I.T. guy, not an accountant.  I think the question still in my mind is: why would the PO price be different than the Invoice price?  Is this simply just in case of errors?  Or is this going to be due to possible fluctuations in currency values?  I think that both of those cases would require a DIFFERENT account be used (Expense:VendorError or Currency)

If you (or anyone who can answer) are still monitoring this thread, can you give an example of which accounts you are using for:

  • Income Account

  • Expense Account

  • Price Difference Account

After a bit of playing, I get it now: This is just an account that will track the difference inventory - purchase cost vs sales price. Not useful for someone simply tracking their own expenses and profitability, but useful for tracking inventory costs.

Xeata Management Inc., James White
on 10/4/17, 9:33 AM

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Asked: 8/24/15, 4:08 PM
Seen: 3734 times
Last updated: 8/19/17, 2:50 PM