We occasionally have a PO that is received at the wrong cost in the prior month. We set the earliest apply date each month, so do not want to go back and un-received the PO. How do you handle this on the AP side so that the AP Clearing account is correct? We use DocStar.
I see one potential options and curious is this is correct:
-Process the PO line in DocStar for the received cost so that the correct amount comes off of the Received not Invoiced report.
-ADD a Line Misc Charge and set up a reason code = enter the amount of difference between the PO and Invoice as a Misc. Charge.
Are you trying to go back and correct your expense/inventory and AP Clearing accounts to reflect the actual cost of the receipt, or are you just trying to make sure that when you enter the invoice for the receipt, AP Clearing is zeroed-out (for this receipt) and the additional expense is captured?
If it’s the former, then the period isn’t closed yet and you can redo the receipt.
If it’s the latter, you can just enter the invoice at the correct cost and two things will happen when you post – reverse the debits and credits if the receipt price was too high vs actual:
AP Clearing will be debited and AP credited for the amount of the receipt (wrong cost).
The original expense account/WIP/PPV account (depending on the type of receipt and company settings) will be debited and AP credited for the difference in Invoice cost and receipt cost.
The net result is that AP has the full amount of the invoice and AP Clearing has $0 left over for this receipt. The difference goes to different accounts depending on the receipt type and company settings, but will end up as either COGS or Operating Expenses on your books.
For the latter (enter the invoice for the receipt, AP Clearing is zeroed-out, and the additional expense is captured) - how are you making sure that the proper amount goes to AP Clearing versus the PPV account? Do you manually update the GL Analysis for the AP Invoice per image below? For this example, the item was received at $790.96, but the invoice came for $1,038.96 - a difference of $248. To do this, we manually had to edit the GL analysis for this line. Otherwise, the system was putting the full amount to AP Clearing and the GL account was off compared to Received Not Invoiced report.
Here is a test example where the invoice came in for $600 but the receipt was entered for $567.50, a variance of $32.50. You are correct that the full $600 is going to AP Clearing, but at the bottom of the edit list, it also notes “Purchase Price Variance G/L Posting occurs at the time of Capture COS/WIP Activity Process”
In fact, after posting the invoice, AP Clearing is off by that variance. However, the Inv/WIP Report also shows the offset coming out of AP Clearing and applying more cost to the expense account on the PO receipt.
I am looking back on this again and this is very helpful. Thank you for this 3 months ago and sorry for the delayed reply! I had this happen again and now I see exactly what your screen shots are showing and how we can get this fixed.
