Purchase Order PORCNMNU Help - Elliott Business Software



P/O Reconciliation Process

P/O Reconciliation Process

Difference between On-Line Receiving and Batch Receiving

 

Before we talk about the purpose of this feature, we have to understand the difference between On-Line and Batch receiving.  The following table outlines the difference between these two receiving methods:

 

 

 

On-Line Receiving

Batch Receiving

P/O & I/M transactions

Once a transaction is entered, the inventory is update immediately.  Easy to use and less control.

Once transaction is entered, you can review and edit the data.  You will need to post transactions to update inventory.

Inventory Trx. Audit Trail Report

Show in audit trail format.

Show in inventory ledger format for all transactions that affect inventory quantity balance.  Great report!

I/M Distribution

No impact on I/M distribution

Dr. Inventory Account

Cr. Receiving Accrual Account

A/P vouchering when received a PO invoice

Cr. Accounts Payable

Dr. Inventory

Cr. Accounts Payable

Dr. Receiving Accrual Account

Month End Reconciliation

G/L Inventory balance will not match I/M Stock Status Report.  Therefore, you need to find all the receiving not invoice, or invoice not receiving transaction to reconcile G/L and Inventory sub-ledger.  This is a manual process and can be time consuming.

G/L Inventory balance should match I/M Stock Status Report.  However, there will be value in Receiving Accrual Account to reconcile at month end.  If you do not enable “Receiving Accrual Account Reconciliation” feature, there’s no easy way to reconcile.

G/L Financial Statement

G/L Inventory does not reflect your true inventory value.

Add “Receiving Accrual Account” to your Balance Sheet as a temporary liability account.

 

 

Application Overview

 

If you are using batch receiving in Purchase Order, posting PO receiving updates the General Ledger (via the GL Inventory Interface) by debiting inventory and crediting the receiving accrual account as a temporary liability account.  Without enabling this feature, there are no sub-ledger detail reports that could be used reconcile the ending balance in the G/L receiving accrual account.

 

The purpose of this feature is to provide a means of reconciliation for the P/O receiving accrual account.  For data accuracy and integrity, the Reconciliation Process should be done prior to your End of Month Reporting.  As a bonus, this feature will also speed up A/P voucher processing. 

 

If you are using on-line receiving method, there’s no need to enable this feature because there’s no such a concept as “Receiving Accrual Account” in on-line receiving process.  However, we do recommend most users to use batch receiving instead of on-line for the additional features and benefits of batch receiving process.

 

 

NOTE:  This use of this feature is controlled, (turned off and on), in Accounts Payable Global Setup.


Additional Files Used by This Feature:

 

Accounts Payable

 

1.   APRCNFIL - Receiving Account Reconciliation File. This file will be updated when posting AP Transactions.  Two reports will be generated from this file:  The Outstanding Report (similar to A/P Open Items), and The Date by Date Report.  We will discuss the purpose of these reports later in this document.   

2. APRCNHIS - Receiving Reconciliation History File.  This file    will be updated when you purge the APRCNFIL file.  The purpose of this file is to provide history information.  You can generate an Outstanding Report from this file. 

Purchase Order

 

1.   PORCNFIL - Receiving Account Reconciliation File.  This file will be updated after posting Receiving Transactions in P/O.  Two reports will be generated from this file: The Outstanding Report, and The Date by Date Report.

 

2.   PORCNHIS - Receiving Reconciliation History File.  This file will be updated when you purge the PORCNFIL file.  The purpose of this file is to provide history information.  You can generate an Outstanding Report from this file.

 

Setting Receiving Accrual Account in P/O Setup

 

Before we can begin using this feature, you will need to setup the Receivings Accrual Account.  Figure 2A.4 shows how to do this.  Field 16 under P/O setup is where you define the account.  In our example, we set this account to 02165-10000-00000.

 

 

     

 

Figure 2A.4 P/O Setup

 

 


Run Instructions

 

Purchase Order Menu Ò Processing Ò Reconciliation Processing

Updating and Maintaining P/O & A/P Account Reconciliation Files

 

P/O Receiving: We will start by entering and receiving a purchase order as shown in Figure 2A.5.  After posting P/O Receiving, the system will update the Receiving Account Reconciliation File where it can be maintained as shown in Figure 2A.6.

 

 

 

Figure 2A.5 shows a purchase order being received.

 

 

Figure 2A.6.

 

 After posting P/O Receiving, the system automatically updates The P/O Account Reconciliation file.

 

 

 

Processing A/P Transactions

 

During A/P transaction, the system will display a P/O Reconciliation Search window, (Figure 2A.7 next page).  You can easily select the line item by highlighting it and pressing <Enter>.  The voucher no. is 50138, and applied to P/O 000039-00. Note:  If you prepaid a P/O without receiving it, you will still need to enter the “Receiving Accrual Account”,  “P/O No.”, “Line No.”, “Qty”, and “Unit of Measure”.  After posting the A/P Transactions, the system updates the A/P Receiving Account Reconciliation File, Figure 2A.8 next page.  This is a maintained file that can be edited. 

 

 

 

 

Posting Considerations   P.O. 000039-00

 

Posting P.O. Receiving:                    DR Inventory                        $720.00

                                                      CR Rec Accrual                     720.00

 

Posting A/P Voucher                        DR Rec Accrual                   $720.00

                                                      CR Accts Payable                 720.00           

 

If Invoice had come in at $750.00

 

Posting A/P Voucher                        DR Rec Accrual                   $720.00

                                                      DR PPV                                  30.00

                                                      CR Accts Payable                 750.00           

                                         

Reporting

 

The Reporting Function is accessed from:

Elliot Main Menu à Distribution à Purchase Order & Receiving à Processing à Reconciliation Processing à Report

 

 

What makes this feature powerful is that it provides detailed reporting to reconcile the ending balance in the G/L receiving accrual account.  This function gives you the option to print three reports: 1.  Outstanding Report, 2.  Date by Date Report, and 3.  History Report.

 

1.   Outstanding Report: This report should be run at the end of the accounting period.  The report will list all Receivings that have not been invoiced and Invoices that have not been received, and compare the net balance to the GL Receiving Accrual Account.  This report is generated from the A/P and P/O Account Reconciliation Files. 

 

2.   Date by Date Report: This report should be run when the Outstanding Report net balance does not match the GL Receiving Accrual Account balance.  This report compares the subledger net changes with the G/L Accrual Account and isolates any discrepancies on a day by day basis.

 

If the net changes for a day match, that day will be skipped.  If net changes do not match, the report will print the subledger detail and the G/L Accrual Account detail for that day.  By isolating discrepancies to a day, it then becomes relatively easy to identify where the problems come from, e.g., someone updates the G/L Accrual Acct, but not from A/P or P/O.  This report is generated from the A/P and P/O Reconciliation Files, and the GL Transaction File.

 

2.       History Report: This is exactly like the Outstanding Report.  The difference is that it is generated from the history files: APRCNHS and PORCNHS.  These two history files are updated when you purge the A/P and the P/O Account Reconciliation files.

 

Oustanding Report

 

This report items from the AP Reconciliation File and the P/O Reconciliation File.  At the time of printing, you have the option to report fully reconciled items.   When you purge these files, only the reconciled items get purged by a cut-off date.

 

The report is in four sections:

 

            1.         Unapplied A/P

            2.         Outstanding P/O

            3.         Fully Applied P/O

            4.         Grand Total (Net Balance)

 

 

 


Section 1:    Unapplied A/P

                                               

These are A/P invoices posted against prepaid Purchase Orders or those P/O’s or line items that have net been received yet.  When the P/O lines are received, they will be reported as Outstanding P/O line items in Section 2.  To reconcile the P/O line items just received against the Unapplied A/P’s, you must go to Reconciliation Processing Menu, Processing Sub Menu Re-apply.  After this has been done, the posted voucher and posted line items will appear in Section 3, Fully Applied Purchase Order line items.

 

 

O U T S T A N D I N G   R E P O R T

 

 

Show Fully Applied: Yes                                                                                                            

Ranges: Date 03/01/00 Thru 03/31/00                                                                                                 

Print Unapplied A/P                                                                                                                

                                                                                                                                    

Vnd-No Vendor Name                 Vouch# Seq P.O.-No   Ln# Vch-Date Inv-No   Inv-Date Item-No               Trx-Qty   Dist-Amount 

                                                                                                                                    

000300 Anawalt Computer Company    500139 001 000039-00 002 03/15/00 500139   03/14/00 KEYBOARD                10.00        759.80 

000500 Ronson Electronics          500110 001 000009-00 001 03/04/00 500110   03/04/00 CLOCK                  144.00      1,123.20 

                                                                                            Unapplied A/P Sub Total:      1,883.00 

 

 

 

 

 

 

 

Section 2:        Outstanding P/O Line Items

 

This reports items from the P/O Reconciliation file and these line items are P/O line items that have been received but not vouchered in A/P.

 

 

O U T S T A N D I N G   R E P O R T

                                                                                                                                    

Show Fully Applied: Yes                                                                                                            

Ranges: Date 03/01/00 Thru 03/31/00                                                                                                 

Print Outstanding P/O                                                                                                              

                                                                                                                                    

P.O.-No   Ln# Doc-No Vnd-No Item-No         Rcv-Date  Qty-Received      Trx-Amount                                                 

                                                                                                                                    

000038-00 001 000143 000200 CLOCK           03/15/00         10.00          125.40CR                                               

                                                                                                                                    

000038-00 002 000144 000200 K-PR-PAPER      03/15/00         10.00          135.00CR                                               

                                                                                                                                    

                                         Outstanding P/O Sub Total:         260.40CR                                               

 

 

 

 

 

 

 

 

Section 3:        Fully Applied P/O Line Items

 

This report lists the P/O line items matched up, (reconciled) to the corresponding A/P voucher.  If one P/O line item had two receivings, it would appear twice and each with it’s corresponding A/P voucher.  This is also the information, (reconciled items), that gets purged when you run the Purge function.

 

 

 

 

 

O U T S T A N D I N G   R E P O R T

                                                                                                                                    

Show Fully Applied: Yes                                                                                                            

Ranges: Date 03/01/00 Thru 03/31/00                                                                                                 

Print Fully Applied P/O                                                                                                            

                                                                                                                                    

P.O.-No   Ln# Doc-No Vnd-No Item-No         Rcv-Date  Qty-Received      Trx-Amount                                                 

                                                                                                                                    

000039-00 001 000145 000300 KBD-FOC-2       03/15/00         10.00          720.00CR                                               

                                                                                                                                    

               Vouch# Seq Vch-Date Inv-No   Inv-Date       Trx-Qty     Dist-Amount                                                 

               500138 001 03/15/00 500138   03/14/00         10.00          720.00                                                 

                                                         Sub Total:            .00                                                 

                                                                                                                                    

                                       Fully Applied P/O Sub Total:            .00                                                  

 

 

 

 

 

 

Section 4:        Grand Total (Net Balance)

 

This is the last page of the Outstanding Report and reports the difference between Unapplied A/P transactions and outstanding P/O line items.

 

 

 

O U T S T A N D I N G   R E P O R T

 

 

Show Fully Applied: Yes                                                                                                             

Ranges: Date 03/01/00 Thru 03/31/00                                                                                                

Print Fully Applied P/O                                                                                                             

                                                                                                                                   

P.O.-No   Ln# Doc-No Vnd-No Item-No         Rcv-Date  Qty-Received      Trx-Amount                                                 

                                                                                                                                   

                                                       Grand Total:       1,622.60                                                 

 

 

 

 

 

Grand Total:      A Debit balance indicates there are more unapplied A/P transactions than P/O line item receivings.  A Credit Balance indicates more posted receivings than posted vouchers for line items in A/P. 

 

In addition to Prepaid Purchase Orders and line items posted before P/O Receiving, a Debit balance can also occur when you post an A/P voucher without processing it against the P.O. Receiving.  This also another good reason why you should reconcile at Month End.

 

A zero balance will indicate that all the P/O receivings have been matched up to an A/P voucher and that there are no Unapplied A/P transactions. 

 


Remember:

 

P/O Receivings:                   DR Inventory                              CR Accrual Account

 

A/P Vouchers                      DR Accrual Account                   CR Accounts Payable

                        DR Purchase Price Variance (PPV)

 

 

Day By Day Report

 

 

This report groups and isolates all transactions on a Date By Date reporting basis, thus making it easier to find transactions that do not match up. 

 

 

 

D A T E   B Y   D A T E   R E P O R T

 

 

G/L Accural Account: 02165-10000-00000                                                                                             

Date Ranges: 03/14/00 Thru 03/15/00                                                                                                 

                                                                                                                                   

Trx-Date                                              G/L Net Change                                            A/P,P/O Net Change 

                                                                                                                                   

D# 000139 Itm# CLOCK           PO0036                                                                                     601.92CR 

D# 000136 Itm# CLOCK-ADJ       PO0035                                                                                     888.00CR 

D# 000140 Itm# CLOCK-ADJ       PO0036                                                                                     888.00CR 

D# 000137 Itm# DATA-BUS        PO0035                                                                                     741.60CR 

D# 000141 Itm# DATA-BUS        PO0036                                                                                     741.60CR 

D# 000138 Itm# K-BASFDS/HD     PO0035                                                                                     624.00CR 

D# 000142 Itm# K-BASFDS/HD     PO0036                                                                                     624.00CR 

                                                                                                                                    

03/14/00                                                    8,834.70                                                          0.00 

                                                                                                                                    

GL Trx                                                                                                                             

Reference                      Source                                                                                       Amount 

VCH# 500127  VEND# 000200      AP0001                                                                                   1,488.48   

VCH# 500131  VEND# 000100      AP0001                                                                                     357.90   

VCH# 500132  VEND# 000500      AP0001                                                                                   1,123.20   

VCH# 500133  VEND# 000200      AP0001                                                                                   3,009.60   

VCH# 500134  VEND# 000500      AP0001                                                                                   2,855.52   

                                                                                                                                    

03/15/00                                                      260.40CR                                                      499.40 

                                                                                                                                    

GL Trx                                                                                                                             

Reference                      Source                                                                                       Amount 

VCH# 500138  VEND# 000300      AP0005                                                                                     720.00   

D# 000143 Itm# CLOCK           PO0002                                                                                     125.40CR 

D# 000144 Itm# K-PR-PAPER      PO0002                                                                                     135.00CR 

D# 000145 Itm# KBD-FOC-2       PO0004                                                                                     720.00CR 

                                                                                                                                   

AP Trx                                                                                                                              

Vendor Vendor-Name                    Vouch# Invoice# Inv-Date Item-No         PO#       Doc-No        Quantity             Amount 

000300 Anawalt Computer Company       500138 500138   03/14/00 KBD-FOC-2       000039-00 000145          10.000             720.00 

000300 Anawalt Computer Company       500139 500139   03/14/00 KEYBOARD        000039-00 000000          10.000             759.80 

                                                                                                                                    

PO Trx                                                                                                                              

PO#       Doc-No Item-No         Vendor Vendor-Name                      Qty-Received   Qty-Rejected     Unit-Cost          Amount 

000038-00 000143 CLOCK           000200 CompuPart Computer Services            10.000          0.000       15.0000          125.40CR

000038-00 000144 K-PR-PAPER      000200 CompuPart Computer Services            10.000          0.000       13.5000          135.00CR

000039-00 000145 KBD-FOC-2       000300 Anawalt Computer Company               10.000          0.000       72.0000          720.00CR

 

 

 



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