Which statement best describes why price changes should be tied to POs and invoices?

• A. It reduces the need for supplier contact.
• B. It requires excessive approvals.
• C. It ensures changes are traceable and approved, aligning with procurement processes.
• D. It delays payments.

Answer: (C)

Connecting price changes to purchase orders and invoices ensures traceability and proper approvals within the procurement process. When a price change is tied to a PO and the corresponding invoice, every adjustment has a documented justification and an authorized approval, linking it to the contract terms. This creates an auditable trail, helps prevent unauthorized price shifts, and keeps purchasing and finance aligned with budgets and contract obligations. It also supports three-way matching (PO, goods receipt, and invoice) so payments reflect the approved price rather than arbitrary changes, reducing disputes and delays.

The other ideas miss the governance purpose: reducing supplier contact isn’t the aim, extra approvals aren’t the point, and delaying payments isn’t the intended outcome.