AP Supplier Invoices and POs

Transcript

00:00:01

We’ll run through what to do when you receive an invoice from a supplier from whom you’ve purchased products and you’ve actually issued a purchase order and the products have come in and you run the purchase order receive previously.

00:00:11

And now what you need to do is record the suppliers invoice.

00:00:14

Now, as noted on the screen, you should have reviewed and you should be very familiar with how to do a basic accounts payable voucher before you tackle this.

00:00:21

And if you’re not, you should go back to the basic accounts payable voucher entry training video, the one that applies to miscellaneous vendor invoices, and you should run through that first.

00:00:31

So here on the accounts payable voucher screen, I’ve gone ahead and entered the selected the vendor and entered the invoice number and some invoice to your details including the amount.

00:00:39

I’ve overridden the transaction description with the PO number against which the invoice allocated, but that may not be the best strategy because an invoice could cover more than one PO.

00:00:47

You can put an end description you like and as you will see the PO numbers will be cross referenced because when we move into the bottom section where we would normally either specify the general Ledger account numbers.

00:00:58

Or if we were using job costing as was covered in the basic AP Voucher training course, you would enter your job information as we move into that area.

00:01:07

This is what happens.

00:01:08

Screen pops up telling us that we have some accruals on file.

00:01:12

In other words, these will be purchase orders that we received from this supplier for which we have not yet processed and invoiced.

00:01:19

And in this case you can see that there are in fact 2 um.

00:01:24

PO receipts.

00:01:26

Two different purchase order numbers, different amounts obviously, and the system is really asking me if this invoice is for one of those.

00:01:33

Then please allocate this invoice or this.

00:01:36

Yeah, the supply invoice against those and if there’s a variance, we’ll have to deal with any variance at this point in time.

00:01:42

So we can see that this invoice applies to purchase order number 720729.

00:01:47

I can simply click in the invoice field and it actually default.

00:01:50

The remaining amount of the accrual against this invoice.

00:01:54

Now, if there was a discrepancy, if they’d invoiced as a different amount than the amount in the purchase order, your company should have policies on how you deal with those.

00:02:02

So we will shortly process another invoice.

00:02:04

We will explore a couple of those possibilities, but for now we’re going to say that everything balances.

00:02:09

This invoice was for the same amount as the purchase order.

00:02:12

I’ve allocated the invoiced amount against the remaining amount and I can just click on process and you’ll notice what it’s done is it’s actually created in my distribution line down here for me, so I can just go ahead and post this transaction and we’re done with that one.

00:02:32

Now we’ll deal with.

00:02:33

The transaction where there actually is a discrepancy.

00:02:36

So I’m going to choose the same supplier going to plug in some random invoice number.

00:02:41

In this case, I’m going to make the total amount of this $37.50 and it’s just be consistent with what I did last time.

00:02:50

I’m going to throw in a purchase order number here.

00:02:53

And once again, I’m going to jump down into the detail section and up will pop my accruals.

00:02:58

Now here was that other remaining.

00:02:59

Accrual for the supplier.

00:03:00

As you may recall from last time, but you’ll notice in this case there’s actually a variance we’ve actually been invoiced a different amount than the amount then that was on the accrual.

00:03:11

So we have to deal with this and the way we deal with this is depending on your company policies, as I said, so there’s basically.

00:03:16

Two fundamental models, the most typical model is.

00:03:19

You treat this as a variance, and it gets posted to a variance account and there’s a report that will analyze it.

00:03:24

If the discrepancy was very large, and if your company policy says that you revalue inventory, then you would go through a different process and a much more complex 1 to revalue inventory, assuming it’s still in stock and you haven’t resold it.

00:03:37

So we’re going to use the more regular approach here because this is where 90 something percent of Blue Link users would go and simply process the difference against a variance account.

00:03:51

So first of all, we can once again click in the invoiced amount in the field, but now we actually have to change that to be the amount that actually was invoiced, which in this case was $37.50.

00:04:03

And that basically gives us a little bit of a message which effectively tells us we’ve got to confirm that we really do want to treat this as a variance by clicking on the post variance checkbox.

00:04:15

So if you click on that post variance checkbox, we’re now telling the system.

00:04:18

Yes, I know the accrual was $36.60, but the invoice really is $37.50 and I want you to post the .90 cents

00:04:24

Difference to a varianced account.

00:04:26

And as you can see, what it’s really done is it’s created the two general Ledger in distribution entries down at the bottom for us, one of which goes to a variance account and it will adjust the debit or credit depending on whether it’s an.

00:04:37

Over or under variance.

00:04:38

So that’s really all there is to processing invoices from suppliers when you’ve already received the purchase order and it’s an accrual and now you’re just offsetting the invoice against that amount.