Invoices are assigned source code PO-IN on the G/L Transactions report.
When P/O invoices are posted in Accounts Payable, journal entries for invoices are created, as follows:
- If a receipt is invoiced without changes to quantities and costs, a
journal entry is created to:
- Debit the item's payables clearing account.
- Credit the vendor's payables control account (with the total of the extended item cost, allocated taxes, and any prorated additional costs and their allocated taxes).
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If quantities or costs were changed on the invoice, Purchase Orders creates journal entries to:
- Debit or credit the item's inventory control (or inventory/expense) account for the difference between the receipt amount and the invoice amount.
- Debit or credit the item's payables clearing account for the difference between the receipt amount and the invoice amount.
- Debit the Payables Clearing account for the original amount of the receipt, net of any adjustments as listed above.
Example: If the item cost increases on an invoice, the difference between the invoice cost and the receipt cost is debited to the item's inventory control or inventory/expense account.
Prorated Additional Costs Added on an Invoice
If a new additional cost is added on an invoice, general ledger journal entries are created by Day End Processing to:
- Debit the Inventory Control account for the cost.
- Credit the payables clearing account.
Non-inventory Items
When invoices for non-inventory items are posted in Accounts Payable, general ledger journal entries are created to:
- Debit the expense account specified for the non-inventory item.
- Credit the vendor's payables control account.
If Purchase Orders uses the option to create G/L entries for non-inventory expenses on receipts/returns (on the P/O G/L Integration screen), when you post receipts, Purchase Orders creates entries to:
- Debit expense accounts.
- Credit the non-inventory payables clearing account.
When you post the invoices later in Accounts Payable, general ledger journal entries will be created to:
- Credit the payables control account.
- Debit the non-inventory payables clearing account.
Expensed Additional Costs
If additional costs are expensed, rather than prorated to the items on a receipt, Day End Processing creates an Accounts Payable invoice to debit the additional cost expense account and credit the vendor's payables control account when it is posted in Accounts Payable.
If Purchase Orders uses the option to create G/L entries for expensed additional costs, Purchase Orders creates debit entries to expense accounts and credit entries to the Expensed Additional Cost Clearing Account when you post additional costs. (Posting the invoices later in Accounts Payable credits the payables control account and debits the Expensed Additional Cost Clearing Account.)
Note: If the additional costs are job-related, Purchase Orders always creates G/L entries for expensed additional costs during posting - whether you select this option or not.
Job-Related Items
If a job-related invoice includes an adjustment to the receipt - such as a change to the cost, quantity, or billing rate - Purchase Orders sends transactions to Project and Job Costing. These transactions do not affect the general ledger or Accounts Payable.
- If you change the billing rate, Purchase Orders generates a new transaction for the difference between the old billing rate and the new billing rate.
- If you also change quantities, Purchase Orders will also create a billing adjustment transaction for the quantity difference.
- If the receipt originated from a purchase order and you change the quantity outstanding, Purchase Orders will update the committed quantities and costs in Project and Job Costing.
Do not edit job-related invoices in Accounts Payable.
Job-related invoices transferred to Accounts Payable from Purchase Orders do not update Project and Job Costing when posted in Accounts Payable.
Purchase Orders directly updates Project and Job Costing with invoice amounts.