diff --git a/build.go b/build.go
index 3a83136..a2463c1 100644
--- a/build.go
+++ b/build.go
@@ -160,6 +160,30 @@ func buildPackage(ctx context.Context, script string, mgr manager.Manager) ([]st
 		dec.LikeDistros = false
 	}
 
+	fn, ok := dec.GetFunc("version")
+	if ok {
+		log.Info("Executing version()").Send()
+
+		buf := &bytes.Buffer{}
+
+		err = fn(
+			ctx,
+			interp.Dir(filepath.Dir(script)),
+			interp.StdIO(os.Stdin, buf, os.Stderr),
+		)
+		if err != nil {
+			return nil, nil, err
+		}
+
+		newVer := strings.TrimSpace(buf.String())
+		err = setVersion(ctx, runner, newVer)
+		if err != nil {
+			return nil, nil, err
+		}
+
+		log.Info("Updating version").Str("new", newVer).Send()
+	}
+
 	var vars BuildVars
 	err = dec.DecodeVars(&vars)
 	if err != nil {
@@ -249,7 +273,7 @@ func buildPackage(ctx context.Context, script string, mgr manager.Manager) ([]st
 		return nil, nil, err
 	}
 
-	fn, ok := dec.GetFunc("prepare")
+	fn, ok = dec.GetFunc("prepare")
 	if ok {
 		log.Info("Executing prepare()").Send()
 
@@ -259,26 +283,6 @@ func buildPackage(ctx context.Context, script string, mgr manager.Manager) ([]st
 		}
 	}
 
-	fn, ok = dec.GetFunc("version")
-	if ok {
-		log.Info("Executing version()").Send()
-
-		buf := &bytes.Buffer{}
-
-		err = fn(
-			ctx,
-			interp.Dir(srcdir),
-			interp.StdIO(os.Stdin, buf, os.Stderr),
-		)
-		if err != nil {
-			return nil, nil, err
-		}
-
-		vars.Version = strings.TrimSpace(buf.String())
-
-		log.Info("Updating version").Str("new", vars.Version).Send()
-	}
-
 	fn, ok = dec.GetFunc("build")
 	if ok {
 		log.Info("Executing build()").Send()
@@ -617,6 +621,14 @@ func archMatches(architectures []string) bool {
 	return slices.Contains(architectures, arch)
 }
 
+func setVersion(ctx context.Context, r *interp.Runner, to string) error {
+	fl, err := syntax.NewParser().Parse(strings.NewReader("version='"+to+"'"), "")
+	if err != nil {
+		return err
+	}
+	return r.Run(ctx, fl)
+}
+
 func uniq(ss ...*[]string) {
 	for _, s := range ss {
 		slices.Sort(*s)
diff --git a/docs/build-scripts.md b/docs/build-scripts.md
index a420570..7c5c2ec 100644
--- a/docs/build-scripts.md
+++ b/docs/build-scripts.md
@@ -226,15 +226,11 @@ The rest of the scripts are available in all packages.
 
 This section documents user-defined functions that can be added to build scripts. Any functions marked with `(*)` are required.
 
-All functions are executed in the `$srcdir` directory
-
-### prepare
-
-The `prepare()` function runs first. It is meant to prepare the sources for building and packaging. This is the function in which patches should be applied, for example, by the `patch` command, and where tools like `go generate` should be executed.
+All functions except for `version()` are executed in the `$srcdir` directory
 
 ### version
 
-The `version()` function updates the `version` variable. This allows for automatically deriving the version from sources. This is most useful for git packages, which usually don't need to be changed, so their `version` variable stays the same.
+The `version()` function is the first to run. It updates the `version` variable. This allows for automatically deriving the version from sources. This is most useful for git packages, which usually don't need to be changed, so their `version` variable stays the same.
 
 An example of using this for git:
 
@@ -247,6 +243,12 @@ version() {
 
 The AUR equivalent is the [`pkgver()` function](https://wiki.archlinux.org/title/VCS_package_guidelines#The_pkgver()_function)
 
+This function does not run in `$srcdir` because it is executed before the source directory is even created. Instead, it runs in `$repodir`.
+
+### prepare
+
+The `prepare()` function is meant to prepare the sources for building and packaging. This is the function in which patches should be applied, for example, by the `patch` command, and where tools like `go generate` should be executed.
+
 ### build
 
 The `build()` function is where the package is actually built. Use the same commands that would be used to manually compile the software. Often, this function is just one line: