The standard purchasing and accounts payable process is to receive the purchase order items on a purchase order. Once you receive the items, they are set to a Closed status. When you receive the supplier invoice for the closed items, you can select them during voucher processing.
During month end procedures, it may happen that you have received items but the supplier has not sent an invoice yet. Depending on the financial processes of your organization, you may need to consider the received values on the GL since the expenses do occur at a later stage. To handle this, configure a Purchase Accrual GL account to defer the values of the received goods and push them to the correct expense accounts at a later stage (in the next month).
Configure the Purchase Accrual GL Account
To configure the GL account to use as the Purchase Accrual GL Account, you must create a GL account. After you add the GL account, you can configure the account as the Purchase Accrual GL Account:
- Click the Purchasing Configuration link from the Main Menu. The Purchasing Configuration screen opens.
- Select the General tab.
- Expand the Distribution section.
- Click the Select link in the Purchase Accrual GL Account field. This is the GL account the values are deferred to within the Accrual process. The Advanced Search GL Accounts screen opens.
- Select the purchase accrual account.
- Click the Select button. You return to the Purchasing Configuration screen.
- Click OK.
Configure the Purchase Accrual GL Distribution
Since you need to distribute the accrued values to the appropriate expense accounts as soon as you receive the supplier invoice, you must modify the GL distribution for the inventory items accordingly on the inventory major (or minor) groups depending on the GL distribution setup for Payables. To take the value out of the Purchase Accrual GL Account in the next month, you must make the following adjustments:
- Click the Major Inventory Groups link (and/or Minor Inventory Groups link depending on the GL setup) from the Main Menu. The Major Inventory Groups or Edit Minor Inventory Groups screen opens.
- Select the group that uses purchase accruals.
- Right-click and select Edit. The Edit Inventory Group screen opens.
- Select the GL Distribution tab.
- Click the Insert Row link. A new row is added to the tab.
- Enter the following information:
- Type – Select CR Purchase Accrual.
- GL Account – Select the Purchase Accrual GL Account configured in the previous section.
- Click OK.
- Repeat steps 2-7 for all inventory groups you need to update. Typically, you need to update all existing groups.
Process Purchase Order Accruals
The Purchase Accrual Inquiry screen from the Main Menu lists all received purchase order items that are not associated with a supplier invoice. During the month end procedures, use this screen to review all received but not yet paid goods to define how to handle them within the purchase accrual process.
- Click the Purchase Accrual Inquiry link from the Main Menu. The Purchase Accrual Inquiry screen opens.
- Review the list of items and determine if there are items you need to omit or close.
- Omit - You can omit all purchase order items you do not want to distribute to the Purchase Accrual GL Account for the next month. This typically applies to all event related purchases so showing the Event ID and Event Header columns is helpful. To omit items:
- Select the item(s) to omit. Use Ctrl+Click or Shift+Click to select multiple items.
- Right-click and select Tools -> Omit. The items are removed from the screen.
- Close – You can close the purchase order item and have it excluded from any further financial processes. When you close a purchase order item, it is no longer available to add to a supplier invoice/voucher. You should only select this option if you received an item physically but there is no invoice to receive. If items are marked as received but they are not actually received, best practise is to cancel the purchase order item rather than closing it. To close items:
- Select the item(s) to close. Use Ctrl+Click or Shift+Click to select multiple items.
- Right-click and select Tools -> Close. The Close Date screen opens.
- Enter the close date.
- Click the Continue button. The items are removed from the screen.
- Omit - You can omit all purchase order items you do not want to distribute to the Purchase Accrual GL Account for the next month. This typically applies to all event related purchases so showing the Event ID and Event Header columns is helpful. To omit items:
- The remaining items on the screen are accrued during the purchase order accrual process.
Next, you need to create the journal entries for the purchase accrual.
- Click the Journal Entries - Purchase Accrual link from the Main Menu. The Journal Entries | Purchase Accrual screen opens.
- Click the Add button. The Add Journal Entry | Purchase Accrual screen opens.
- Enter the following information:
- Description - Name of the journal entry.
- Year - Period - Fiscal period and year for the accrual. Defaults to current period.
- Entry Number - Number assigned to the journal entry. *AUTO uses a system-generated entry number.
- Reverse Entry – If checked, a reverse journal entry is automatically created for the fiscal period entered into the Reversal FYP field.
- Transaction Date – Date for the journal entry.
- Currency - Currency for the journal entry.
- Reversal FYP - Period for the reverse journal entry. Defaults to the next fiscal period.
- Expand the Advanced section.
- Enter the following information:
- Method - Select the method for the accrual:
- Received - Distribution for purchase order items you have received into inventory but not yet received an invoice for are generated. Most common method.
- Ordered - Distribution for purchase order items you have issued but not yet received into inventory are generated.
- Date - Date to use to determine which purchase order items are included in the accrual. Only available if Received is selected as the Method.
- Period End Date - Date to use to determine which purchase order items are included in the accrual. Only available if Ordered is selected as the Method.
- Date From/To - Distribution for purchases made before the selected date are generated.
- Method - Select the method for the accrual:
- Click OK. The Edit Journal Entry screen opens.
- Click the Tools button.
- Select Generate Journal Entry. When the journal entry is created successfully, a blue success message displays and the Edit Journal Entry screen refreshes to show the journal entry lines.
- Review the journal entry details.
- Click the Tools button.
- Select Approve Journal Entry. When the journal entry is approved, a blue success message displays, the Edit Journal Entry screen refreshes and the status updates to Approved.
- Click the Tools button.
- Select Post Journal Entry. The Post Journal Entry screen opens.
- Click OK. When the journal entry is posted, a blue success message displays, the Edit Journal Entry screen refreshes and the status updates to Posted.
- Click OK. If you selected to create a reversing journal entry, the new reverse journal entry is created. You can view it on the Journal Entries screen from the Main Menu.
Comments
4 comments
Hi
For Purchase Accrual Journal Entries how can we easily export this to excel, previously we used the tasks and EBMSEZExport, in V30 I have a option under Tools to export however I am being asked for the format ID and then a file, is this the way of exporting this to excel or is there an another way?
Thanks
Kris
0 upvotes
Hi Kris,
Sounds like you are selecting an import option rather than an export option. If you select Tools - > Export to Excel, you'll receive the standard export prompt to export all entries or selected entries and to choose to export as XML:
Thanks,
Maggie
0 upvotes
Thanks Maggie
I don't see the export to excel, the export option I was referring to was 'Export Journal Entry' (as shown below)
Kris
0 upvotes
Hi Kris,
Thanks for the screen shot - that helped me better understand your process. This process uses GL Export Formats to export the journal entry. Export Formats allow you to configure how the export file is created - the order of the columns and the information that is placed into each column. This is so the file is prepared for an import into another system. You can create export formats from the GL Posting Export Format screen.
Thanks,
Maggie
0 upvotes
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