At times, a vendor will invoice us a few dollars less for an item than what was reflected on the PO and Item receipt.  What is the best way to handle this price difference when matching the invoice to the receipt?  If I adjust the price when entering the invoice, the amount booked against the received not billed account (debit) will not match the amount the was credited against this account when the item was originally received.  Do I issue a credit note against the invoice for the price difference?  If so, will this have any impact on quantities received?

mikeg:

If I adjust the price when entering the invoice, the amount booked against the received not billed account (debit) will not match the amount the was credited against this account when the item was originally received.

This is actually exactly what you should do. When receiving inventory the credit is placed against a clearing acct while waiting for the invoice. Inventory is, of course, debited. When an invoice is received, the clearing acct is cleared and the amount "moved" to AP. If there is a difference from the original amount, clearing acct is cleared (debit) with the original amount (of course, it has to be zero after the transaction, right), AP gets the new/correct invoice amount and the difference is posted to the item (IC). Works well - try it on sample data with simple/rounded amounts and you'll get a clearer picture.

The only problem in this whole setup is when you adjust after the goods were sold. The same procedure as above is still applied so you end up with wonky values in IC. If it is not material then it is probably fine but it can cause odd IC values.

Good luck.