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What happens during the Accounts Receivable update process?

During the update process, the following occurs:

• When cash, credit card, and ACH payment receipt entries are applied against invoices in the Open Invoices file and the Customer file, the respective balances due are reduced in the appropriate aging categories.

• The General Ledger Daily Transaction file is updated with the cash, accounts receivable, and miscellaneous general ledger account postings. The deposit date for each deposit is used as the posting date when the Daily Transaction Register is printed and updated.

• The Monthly Cash Receipts file is updated with the cash receipts information.

• The Sales Tax History file is updated with the tax collected for each tax code.

• The Deposit Transaction Report is updated with any credit card and ACH deposits.

• Depending on your security setup, the Daily Transaction Register may be automatically printed and updated. Or you will see a message asking if you want to print the Daily Transaction Register. You can then print and update the register. Updating the Daily Transaction Register posts the general ledger entries from the Cash Receipts Journal.

General ledger postings made from Accounts Receivable Invoice Data Entry are processed the same way as postings for invoices entered through the Job Billing process, with the exception that Accounts Receivable Invoice Data Entry does not make work-in-process adjustments.

The Cash Receipt process first applies the cash amount to the net invoice balance (invoice balance minus retention), and then applies any remaining amount to the retention balance. The general ledger accounts are determined by the bank code for the cash receipt and the customer's division as specified in Accounts Receivable Division Maintenance.

For more information, see Account Maintenance.

Example: Posting Using Cash Receipts Entry

In Cash Receipts Entry, you are required to distribute the appropriate deposit amounts to open invoices (or customer balance, if balance forward). If a discount was allowed for the invoiced amount, you will also debit this account.

Note Discounts are not calculated or posted until the cash receipt is entered.

Assuming a 3 percent discount on a $100.00 sale, the following general ledger postings are made.

G/L Account	Debit	Credit
Cash	106.21
Discounts Allowed	3.29
Accounts Receivable	______	109.50
	109.50	109.50

Example: Cash Receipts Entry Calculations

The calculations that follow are performed in the order shown for each invoice processed in the Cash Receipts Journal update. The average is based on the most recent 20 invoices so that the total days (and invoice) do not become too large.

 

ADP =	Average days payment from invoice date (Posting Date Invoice Date)   (Total Days for last 20 invoices) (Avg. Days for this invoice) Previous ADP x Previous NOI + (Post Date Invoice Date) NOI + (Limited to 20)
ADO =	Average days overdue from invoice due date (Posting Date Invoice Due Date)   (Total Days for last 20 invoices) (Avg. days for this invoice) Previous ADO x Previous NOI + (Post Date Invoice Due Date) NOI + 1 (Limited to 20)
NOI =	Number of invoices to use in days calculation (Limited to range of 0 to 20)   Previous NOI + 1 (Limited to 20)

Example: Posting Using Invoice Data Entry

When you enter invoices using Invoice Data Entry, distributions are posted as credits to the respective general ledger accounts. The system makes the offsetting debit posting to the accounts receivable account automatically.

If the Post Cost of Goods Sold to General Ledger check box is selected in Accounts Receivable Options, additional general ledger postings are made.

If you issue a credit memo using Invoice Data Entry, the general ledger postings will be a credit to decrease Accounts Receivable and a debit to decrease the appropriate sales accounts. When you enter a cash invoice, the cash sales account is debited instead of the accounts receivable account. All other postings are processed identically.

A typical General Ledger posting for a $100.00 sale allowing a 3 percent discount is made as follows.

 

G/L Account	Debit	Credit
Accounts Receivable	106.50
Sales Account		100.00
Sales Tax		6.00
Freight		3.50
Discounts Allowed	3.00	_____
	109.5	109.50

 

Assuming the Cost of Goods Sold amount is $75.00, the following posting is made:

G/L Account	Debit	Credit
Cost of Goods Sold	75.00
Inventory	____	75.00
	75.00	75.00

What happens during the Sales Order update process?

When you print the Sales Journal and daily sales reports, you are given the option to perform the invoice update to the permanent files. During the update process, the following occurs:

• Invoices are posted to the Accounts Receivable Open Invoice file. Job number and retention information is also updated to the Open Invoice file so that cash receipts can process Job Cost payment updates and applied retention updates. Appropriate salesperson commission information is updated to the Salesperson Commission file. Sales tax information is also updated.

• Invoice amounts are updated by period and year in the Customer file.

• The on-hand quantity for each inventory item is updated by the shipped quantities on invoices. Quantity and dollars sold information for each item is updated.

Example: Posting a Sales Order invoice with the Relieve Inventory check box selected

The following example illustrates an invoice with a job number entered but with no cost code or cost type.

If the following conditions are set:

Check Box	Setting
Sales Order Options: Post Invoice Costs to Job Cost	Cleared
Sales Order Options: Relieve Inventory	Selected
Sales Order Options: Use Sales Order Accounts for COGS	Cleared
Sales Order Options: Use Sales Order Accounts for Sales Revenue	Cleared
Job Cost Options: Post to G/L for Work in Process	Selected
Accounts Receivable Options: Sales Journal in Detail	Cleared

The following accounts will be debited or credited with the posting comment indicated:

Account	Debit or Credit	Posting Comment
Account Receivable	Debit	Sales Order accounting date
Sales Revenue	Credit	Sales Order accounting date
Cost of Sale	Debit	Sales Order accounting date
Inventory	Credit	Sales Order accounting date

• Completed sales orders are removed from the Open Sales Order file, and back orders are created for any items back ordered from invoices being updated.

• Postings are made to the General Ledger Daily Transaction file for future printing. Sales order invoice information is posted to the general ledger using the general ledger accounts entered on invoice lines. When retention exists on an invoice, the retention amount is also posted to the general ledger.

• If Yes or Summary is selected in the Retain in Detail field in Accounts Receivable Options, the appropriate invoice information, including shipping information, is updated to the Invoice/Shipping History file. Job number and retention information is also updated to the Invoice History file to allow job information to be viewed in Invoice History Inquiry, printed on the Invoice History Report, and reprinted on invoices.

• If the Retain Comment Lines check box is selected in Accounts Receivable Options, invoice comment lines will be updated to the Invoice History file.

• Sales Order invoice inventory billing and retention information is updated to the Job Cost file when a valid job number, cost code, and cost type are entered for an invoice. The invoice billed amount, last billed date, payments received, and payments received date are updated in the Job Cost file. If the Post Invoice Costs to Job Cost check box is selected in Sales Order Options and a valid cost code and cost type have been entered in Sales Order Invoice Data Entry, the actual cost amount and last cost transaction date are also updated in the Job Cost file. The Job Cost Detail file is also updated with cost and quantity shipped information.

• If the Post Invoice Costs to Job Cost check box is selected in Sales Order Options, the Job Cost Transaction Detail file is updated with any deposits or credit card and ACH payments made for invoices with valid job information entered. Billing and cost records are also created and/or updated.

• If Amounts Only is selected in the Post Invoice Costs to Job Estimates field in Sales Order Options and a valid cost code and cost type are entered for an invoice, the costs for all data entry lines will be added to any existing estimate amounts in the Cost Code Detail file and they will be posted to the Job file. If Amounts + Units is selected in the Post Invoice Costs to Job Estimates field, both costs and units are posted to the Cost Code Detail file, and the costs are posted to the Job file.

• If the Relieve Work in Process check box is selected in Sales Order Options, job costs are relieved from the work in process account and posted to the cost of sales account. If the Relieve Work in Process check box is cleared, job costs are posted to the Job Transaction Detail file and the costs will have an Unbilled status.

Example: Posting a Sales Order invoice with the Relieve Work In Process check box selected for a percent of complete job

If the following conditions are set:

Check Box	Setting
Sales Order Options: Post Invoice Costs to Job Cost	Selected
Sales Order Options: Relieve Work in Process	Selected
Sales Order Options: Use Sales Order Accounts for COGS	Cleared
Sales Order Options: Use Sales Order Accounts for Sales Revenue	Cleared
Sales Order Options: Include Job Number and Description in G/L Comment	Cleared
Job Cost Options: Post to G/L for Work in Process	Selected
Accounts Receivable Options: Sales Journal in Detail	Selected

The following Accounts will be debited or credited with the posting comment indicated:

Account	Debit or Credit	Posting Comment
Account Receivable	Debit	Sales Order accounting date
Sales Revenue	Credit	Bill-to name + invoice number + batch number (if using batch processing)
Cost of Goods Sold	Debit	Bill-to name + invoice number + batch number (if using batch processing)
Work in Process	Credit	Bill-to name + invoice number + batch number (if using batch processing)
Inventory	Credit	Bill-to name + invoice number + batch number (if using batch processing)

Example: Posting a Sales Order invoice with the Relieve Work In Process check box cleared for a percent of complete job

If the following conditions are set:

Check Box	Setting
Sales Order Options: Post Invoice Costs to Job Cost	Selected
Sales Order Options: Relieve Work in Process	Cleared
Sales Order Options: Use Sales Order Accounts for COGS	Cleared
Sales Order Options: Use Sales Order Accounts for Sales Revenue	Cleared
Sales Order Options: Include Job Number and Description in G/L Comment	Cleared
Job Cost Options: Post to G/L for Work in Process	Selected
Accounts Receivable Options: Sales Journal in Detail	Selected

The following accounts will be debited or credited with the posting comment indicated:

Account	Debit or Credit	Posting Comment
Account Receivable	Debit	Sales Order accounting date
Sales Revenue	Credit	Bill-to name + invoice number + batch number (if using batch processing)
Cost of Goods Sold	Debit	Bill-to name + invoice number + batch number (if using batch processing)
Inventory	Credit	Bill-to name + invoice number + batch number (if using batch processing)

Example:  Posting a Sales Order invoice with the Relieve Work In Process check box cleared for a completed contract job

If the following conditions are set:

Check Box	Setting
Sales Order Options: Post Invoice Costs to Job Cost	Selected
Sales Order Options: Relieve Work in Process	Cleared
Sales Order Options: Use Sales Order Accounts for COGS	Cleared
Sales Order Options: Use Sales Order Accounts for Sales Revenue	Cleared
Sales Order Options: Include Job Number and Description in G/L Comment	Cleared
Job Cost Options: Post to G/L for Work in Process	Selected
Accounts Receivable Options: Sales Journal in Detail	Selected

The following accounts will be debited or credited with the posting comment indicated:

Account	Debit or Credit	Posting Comment
Account Receivable	Debit	Sales Order accounting date
Sales Revenue	Credit	Bill-to name + invoice number + batch number (if using batch processing)
Work in Process	Debit	Bill-to name + invoice number + batch number (if using batch processing)
Inventory	Credit	Bill-to name + invoice number + batch number (if using batch processing)

For Percent Complete jobs, the Billed field is set to Yes in the Job Transaction Detail file for job transactions with a transaction date less than or equal to the sales journal posting date. General Ledger entries are also created in the General Ledger Daily Transaction Register to record the relieving of work-in-process cost and cost of goods sold.

Example - Posting an Accounts Payable invoice to a percent complete job

When an Accounts Payable invoice of $100 is posted on 5/1/2010 to a percent complete job, you will have the following results:

A sales order is entered for this job, the item being sold to the job/cost code has a price of $200 and a cost of $68.50 is then entered and posted with the Sales Order Sales Journal posting date set to 5/15/2010. The Daily Transaction Register will show a credit to Work-in-Process and a debit to Cost of Goods Sold of $168.50, which equals the cost of the item on the sales order invoice, plus the cost that was previously entered using Accounts Payable. Note that the entry of a cost code/cost type in sales order invoices has no bearing on the relieving of outstanding costs, so if the current sales order invoice line did not have a cost code, only $68.50 would be credited to Work-in-Process and debited to Cost of Goods Sold.

• If Write Back to Job is selected in the Validate Customer for Job field in Sales Order Options, and the customer number entered for the invoice is not associated with the job number entered for the invoice, the Job file will be updated with the customer number entered.

• When an invoice for a Sage CRM sales order is updated, a note is written back to the related opportunity in Sage CRM.

When the update is completed, you can print the Daily Transaction Register. Based on your security setup, the register may be automatically printed and updated.

What is the difference between the invoice date and the posting date?

The invoice date refers to the date entered in the Invoice Date field in Sales Order Invoice Data Entry. The posting date refers to the date that the entry is posted to the General Ledger module.

Sales history is stored by invoice date and posting date, rather than by period-to-date, year-to-date, prior-year, or future year buckets. History can be retained for up to 99 years based on the selection in the Years to Retain History field in Sales Order Options.

When printing reports such as the Customer Sales History and Sales Recap reports, you can select whether to print a report by posting date or by invoice date. Because the posting date refers to the date the entry is posted to the General Ledger module, selecting to print by posting date allows you to print the report by fiscal years/periods defined in the General Ledger module. Selecting to print by invoice date allows you to print the report by calendar years and months.

Because invoice dates and posting dates may be different for a transaction, the selection you make may affect the grouping of your data on your report.

Example - Printing by posting date or invoice date when these dates occur in different periods/months

If an invoice is posted on 5/31/2010 but the invoice date is 6/1/2010, selecting to print a report by posting date or invoice date will have the following results:

If....	Then....
you select to print by posting date	this invoice will be displayed in Period 5.
you select to print by invoice date	this invoice will be displayed in June 2010.

How are costs posted to the Job Cost module from other modules?

Job costs can be posted to the Job Cost module from the Purchase Order or Accounts Payable module if these modules are integrated with the Job Cost module. If the Sales Order module is integrated with the Job Cost module, sales order invoice costs can be posted to the Job Cost module if the Post Invoice Costs to Job Cost check box is selected in Sales Order Options. Make sure costs are posted from only one of these modules. Posting job costs from more than one module can cause an understating of profitability. Not posting job costs from any of these modules can cause an overstating of profitability unless costs are manually transferred to the Job Cost module. See the following sections for more information about how costs are posted to the Job Cost module.

If the Purchase Order module is installed

• If the Post Invoice Costs to Job Cost check box in Sales Order Options and the Integrate with Job Cost check box in Purchase Order Options are both selected, costs can potentially be double-posted to the Job Cost module from the Sales Order and Purchase Order modules and cause an understating of profitability.

• If the Post Invoice Costs to Job Cost check box in Sales Order Options and the Integrate with Job Cost check box in Purchase Order Options are both cleared, costs are not posted to the Job Cost module from either the Sales Order or the Purchase Order module, which can cause an overstating of profitability. If both check boxes are cleared, costs must be transferred to the job using Transaction Entry or Job Posting Entry.

If the Purchase Order module is not installed

• If the Post Invoice Costs to Job Cost check box in Sales Order Options and the Integrate with Job Cost check box in Accounts Payable Options are both selected, costs can potentially be double-posted to the Job Cost module from Sales Order and Accounts Payable and cause an understating of profitability.

• If the Post Invoice Costs to Job Cost check box in Sales Order Options and the Integrate with Job Cost check box in Accounts Payable Options are both cleared, costs are not posted to the Job Cost module from the Sales Order or Accounts Payable module, which can cause an overstating of profitability. If both check boxes are cleared, costs must be transferred to the job using Transaction Entry or Job Posting Entry.

How are job costs updated to the Job Cost module?

If the Payroll and Accounts Payable modules are installed, all Payroll earnings and Accounts Payable cost information is posted automatically to Job Cost during the respective check and invoice updates performed in these two modules. Cash receipts are recorded using Cash Receipts Entry and are posted automatically to Job Cost as updates are performed. If the Sales Order module is integrated with Job Cost, cost information is posted automatically to Job Cost during the Sales Order update if the Post Invoice Costs to Job Cost check box is selected in Sales Order Options.

When the Accounts Receivable module is integrated, all billing is performed using the Job Billing menu tasks rather than Job Posting Entry. If the Accounts Payable and Payroll modules are not installed, all costs must be entered manually using Job Posting Entry. If the Accounts Receivable module is not integrated with Job Cost, all billing and cash receipts must be entered manually using Job Posting Entry.

If you have other modules installed on your system, but do not want to use Job Cost on an integrated basis, the Post to G/L for Direct Cost Transactions and Post to G/L for Billing & Cash Receipt Transactions check boxes must be cleared in Job Cost Options. This prevents double posting (postings from other modules and from Job Cost) of these transactions to the general ledger.

Following the entry of cost, billing, and cash receipt transactions in Job Posting Entry, the Job Posting Register can be printed, and entries can be updated to the Job Cost files and to the general ledger, if applicable.

To adjust a previously posted transaction, enter the units, extension amount, bill amount, or receipt amount of the transaction as a negative amount (for example, -150.00) to cancel out the previously posted transaction. Enter the adjustment amount of the transaction as a negative number to reduce the total amount, or enter the adjustment amount as a positive amount (for example, 75.00) to increase the total amount of the transaction.

Any direct cost, billing, or cash receipt transaction that has been entered but not yet updated can be modified.

For more information, see Account Maintenance.

How are job billings posted?

The Job Billing process posts invoice amounts to the accounts receivable, retention receivable, and sales tax general ledger accounts as specified for the customer's division in Accounts Receivable Division Maintenance. Invoice amounts are also posted to the revenue or deferred revenue accounts as specified by job type in Job Type Maintenance. Any miscellaneous charges entered for a Time and Material job are credited to accounts entered in Job Billing Data Entry.

If you are using Work-in-Process accounting, jobs using the Percentage of Completion method credit the total billed costs to the work-in-process account and debit the cost of sale account as specified for each cost type in Job Type Maintenance.

If you are using Work-in-Process accounting, jobs using the Completed Contract method credit the deferred revenue account specified by job type in Job Type Maintenance instead of the standard revenue account.

Note To use Job Billing Data Entry, the Accounts Receivable module must be integrated with Job Cost.

Job Billing Posting Example

The following example illustrates a typical general ledger posting for a $1000.00 invoice with 20 percent retention for a Time and Material job.

	G/L Account	Debit	Credit
Net Invoice Amount	Accounts Receivable	800.00
Retention Amount	Retention Receivable	200.00
Taxable Billing	Job Revenue		500.00
Non-Taxable Billing	Job Revenue		470.00
6% Sales Tax	Sales Tax	______	30.00
		1000.00	1000.00

If the job is using the Completed Contract method, and work-in-process accounting is used, the deferred revenue account is used instead of the job revenue account.

If the job is using the Percentage of Completion method, and Work-in-Process accounting is used, the following additional postings are performed.

	G/L Account	Debit	Credit
Billed Cost - Labor	Cost of Sale - Labor	450.00
Billed Cost - Material	Cost of Sale - Material	250.00
Billed Cost - Labor	WIP - Labor		450.00
Billed Cost - Material	WIP - Material	_____	250.00
		700.00	700.00

 

For more information, see Account Maintenance.

What happens during the Purchase Order update process?

During the update process, the following occurs:

• Invoice information, if any, is posted to the Accounts Payable Open Invoice file.

• The history files in the Vendor file are updated with the invoice amounts, if any.

• For inventory items, the quantity on hand is updated by the received quantities on the receipts.

• For miscellaneous items, the period-to-date and year-to-date quantity received and purchased are updated.

• The last cost and average cost for each item is calculated and/or updated in the Inventory file by the unit cost on the receipts.

• The less prepaid amount and the COD amount are updated to the Open Invoice file.

• Purchase orders are updated with the quantities received and/or invoiced for each item.

• The purchase order status is changed to back order if the quantity received does not match the quantity ordered and quantity invoiced (if you are creating accounts payable invoices).

• Purchase order dates last received and last invoiced are also updated.

• Receipt of goods and receipt of invoice information is updated to the Receipt History file according to the selection made in the Retain Receipt History check box in Purchase Order Options.

• Transaction records are created in the General Ledger Daily Posting file for later printing. For more information, see Account Maintenance.

In addition to performing the standard update process, the following occurs for receipts with work order distribution information.

• Receipt of goods cost and quantity information for any item with work order distribution information is updated to the Work Order Entry and Work-in-Process files and does not update inventory.  

• Receipt of Invoice costs associated with special items and miscellaneous items and charges are posted to Work Order files when the invoice is received.

• The general ledger is posted with the appropriate work-in-process account instead of the inventory account.

In addition to performing the standard update process, the following information is updated for receipts with Job Cost distribution information.

• Cost and quantity information associated with any item with job distribution information is updated to the Daily Job Cost Transaction file and the Overhead Allocation file, as appropriate.

• Receipt of goods for inventory items with job distribution does not affect the Inventory file. The items are assumed to be received directly to the job site.

• Receipt of invoice for inventory items does not post to the Job Cost files. Updating of costs to jobs does not take place until the goods are received. Costs associated with special items and miscellaneous items and charges are posted to Job Cost when the invoice is received.

• The general ledger is posted with the appropriate work-in-process account instead of the inventory account.

Examples: Defining Daily Receipt/Invoice Postings

All general ledger postings from Receipt of Goods Entry and Receipt of Invoice Entry are made in the Daily Transaction Register update, which follows the Daily Receipt Registers update. Depending on your security setup, the Daily Transaction Register may be automatically printed and updated when you update the daily receipt registers.

Note Processing a receipt of goods for a miscellaneous charge item will not generate a general ledger posting; the posting will occur during Receipt of Invoice Entry processing.

The following table illustrates a typical general ledger posting for a $100.00 invoice processed in Receipt of Goods Entry. In this example, the receipt of goods and receipt of invoice are processed at the same time.

	G/L Account	Debit	Credit
Item Receipt (Product A)	Inventory - Product A	55.00
Item Receipt (Product B)	Inventory - Product B	35.00
6% Sales Tax	Sales Tax Expense	5.40
Freight Amount	Freight Expense	4.60
Invoice Amount	Accounts Payable	_____	100.00
		100.00	100.00

 

If a receipt of goods entry is made without recording a receipt of invoice at the same time, the following postings are made.

Note The purchases clearing account is posted to instead of the accounts payable account.

	G/L Account	Debit	Credit
Item Receipt (Product A)	Inventory - Product A	55.00
	Purch. Clearing - Prod. A		55.00
Item Receipt (Product B)	Inventory - Product A	35.00
	Purch. Clearing - Prod. B	____	35.00
		90.00	90.00

 

When the invoice for the above receipt is entered in Receipt of Invoice Entry, the following postings are made.

	G/L Account	Debit	Credit
Item Receipt (Product A)	Purch. Clearing - Prod. A	55.00
Item Receipt (Product B)	Purch. Clearing - Prod. B	35.00
6% Sales Tax	Sales Tax Expense	5.40
Freight Amount	Freight Expense	4.60
Invoice Amount	Accounts Payable	_____	100.00
		100.00	100.00

 

Note The net effect of these postings (receipt of goods and receipt of invoice) is the same as the posting made from Receipt of Goods Entry when the goods and the invoice are received and processed together.

If a drop-ship order is processed in Receipt of Invoice Entry, the following postings are made.

Note The cost of goods sold (COGS) account is posted to instead of the purchases clearing account.

	G/L Account	Debit	Credit
Item Receipt (Product A)	COGS - Prod. A	55.00
Item Receipt (Product B)	COGS - Prod. B	35.00
6% Sales Tax	Sales Tax Expense	5.40
Freight Amount	Freight Expense	4.60
Invoice Amount	Accounts Payable	_____	100.00
		100.00	100.00

 

When division processing is used, the customer number pulled from the drop-ship sales order is used as a reference only, and the product line cost of goods sold account is used instead. To retain the customer's division, you must select the Allow Override of G/L Account During Data Entry check box in Purchase Order Options and modify the cost of goods sold account in Receipt of Invoice Entry.

For more information, see Account Maintenance.

Examples: Defining Return of Goods Postings

Postings made in Return of Goods Entry are similar to those made during the Receipt of Goods/Invoice process except the amounts are reversed. Any variance between the cost of goods returned and the value of inventory relieved (based on the valuation method for each item), is posted to the purchase order variance adjustment account.

The following table illustrates a posting for a $100.00 return that records a debit memo to the accounts payable account.

	G/L Account	Debit	Credit
Invoice Amount	Accounts Payable	100.00
Item Receipt	(Product A) Inventory - Product A		50.00
Variance Amount	PO Variance - Prod. A		5.00
Item Receipt (Product B)	Inventory - Product B		35.00
6% Sales Tax	Sales Tax Expense		5.40
Freight Amount	Freight Expense	_____	4.60
		100.00	100.00

 

In the previous example, a $5.00 variance between the return amount ($55.00) and the value of the items relieved from inventory ($50.00) is posted to the purchase order variance adjustment account for product A. There was no such variance for product B.

If the same return is entered without recording a debit memo to Accounts Payable, the following postings are made. Note that the purchases clearing account is debited instead of the accounts payable account.

	G/L Account	Debit	Credit
	Purch. Clearing Prod. A	55.00
Item Receipt (Product A)	Inventory - Product A		50.00
	PO Variance - Prod. A		5.00
	Purch. Clearing - Prod. B	35.00
Item Receipt (Product B)	Inventory - Product B	____	35.00
		90.00	90.00

Examples: Defining Material Requisition Postings

Postings made in Material Requisition Issue Entry are similar to those made in Return of Goods Entry. The inventory account for the items issued is determined by the item's product line. The material requisition expense account defaults to the account number specified in Purchase Order Options, but can be overridden during data entry. Postings are not made to Accounts Payable.

The following table illustrates a typical general ledger posting for a $90.00 material requisition issue entry.

	G/L Account	Debit	Credit
	Mat. Req. Expense	55.00
Item Receipt (Product A)	Inventory - Product A		55.00
	Mat. Req. Expense	35.00
Item Receipt (Product B)	Inventory - Product B	____	35.00
		90.00	90.00

Examples: Posting with Advanced Sales Tax Features

In Receipt of Goods Entry, taxes can be allocated to the inventory cost. In Receipt of Invoice Entry, taxes can be allocated to the special item cost account for special items, and the miscellaneous charge account for miscellaneous items. In Return of Goods Entry, taxes can be allocated to the inventory cost, the special item cost account for special items, or the miscellaneous charge account, as appropriate.

Note Sales tax is included in costs posted to a job if the Expense to Vendor/Item check box is selected for the sales tax code in Sales Tax Code Maintenance.

When the Expense to Vendor/Item check box is selected in Sales Tax Code Maintenance, the nonrecoverable amount will post to the inventory account for each line item. In addition, the nonrecoverable amount is allocated to the inventory item cost.

A nonrecoverable percent must be entered on the tax code. In addition, a general ledger account must be defined. This is typically the accounts payable sales tax account, but any general ledger account can be entered for the non-recoverable sales tax account. The non-recoverable sales tax account entered in Accounts Payable Division Maintenance will be used, unless a non-recoverable tax account is entered in Accounts Payable Sales Tax Account Maintenance for this tax code.

The following invoice will be used in the subsequent examples.

G/L Account	Debit	Credit
Item #1, G/L Distribution #1	600.00
Item #2, G/L Distribution #2	400.00
10% Sales Tax	100.00
Net Invoice Amount	______	1100.00
	1100.00	1100.00

 

Example 1:

The following posting is for a receipt of goods with a nonrecoverable percentage of 100. The Allow Tax and Freight Entry During Receipt/Return of Goods Without an Invoice check box is selected in Purchase Order Options, and the Expense to Vendor/Item check box is selected in Sales Tax Code Maintenance. Sales tax is calculated as $100.00.

G/L Account	Debit	Credit
Inventory Item #1	660.00
Purchases Clearing		660.00
Inventory Item #2	440.00
Purchasing Clearing	______	440.00
	1100.00	1100.00

 

Example 2:

The following posting is for a receipt of invoice for the preceding receipt of goods in Example 1.

G/L Account	Debit	Credit
Purchases Clearing - Item #1	660.00
Purchases Clearing Item #2	440.00
Accounts Payable	______	1100.00
	1100.00	1100.00

In the preceding example, if the nonrecoverable percent was zero, $100.00 in sales tax would post to the Accounts Payable sales tax general ledger account.

Example 3:

The following posting is for a receipt of invoice for the preceding receipt of goods when a variance has occurred as a result of changing the sales tax from $100.00 to $10.00.

Note Changing the cost or the tax schedule, or manually overriding the tax can produce a variance.

G/L Account	Debit	Credit
Purchases Clearing - Item #1	606.00
Purchases Clearing - Item #2	404.00
Accounts Payable		1010.00
Purchases Clearing - Item #1 and #2	90.00
PO Variance Adjustment	______	90.00
	1100.00	1100.00

 

Note Special and miscellaneous items are updated at the receipt of invoice, with no variance. Sales tax will post to either the Accounts Payable sales tax account or the nonrecoverable account at the receipt of invoice, depending on the nonrecoverable percent.

In the preceding example, if the user had no expense to vendor/item, the sales tax would post to either the Accounts Payable sales tax account or the nonrecoverable account at receipt of invoice, depending on the nonrecoverable percent.

Example 4:

In the following posting, assume a nonrecoverable amount of 55 percent. Only a receipt of goods with invoice is shown; this example also applies when entering a receipt of goods, receipt of invoice, or receipt of invoice with a variance.

If posting with the Expense to Vendor/Item check box selected in Sales Tax Code Maintenance:

G/L Account	Debit	Credit
Inventory Item #1	633.00
Inventory Item #2	422.00
A/P Sales Tax	45.00
Accounts Payable	______	1100.00
	1100.00	1100.00

 

The portion of the sales tax that is nonrecoverable is posted to the inventory account. If a nonrecoverable percentage is not specified, the entire sales tax amount is posted to the accounts payable sales tax account. Additionally, the amount posted to the Inventory account is included in the cost of the inventory item.

If posting with the Expense to Vendor/Item check box cleared in Sales Tax Code Maintenance:

G/L Account	Debit	Credit
Inventory Item #1	600.00
Inventory Item #2	400.00
A/P Sales Tax	45.00
Nonrecoverable	55.00
Accounts Payable	______	1100.00
	1100.00	1100.00

The portion of the sales tax that is nonrecoverable is posted to the nonrecoverable account. If a nonrecoverable percentage is not specified, the entire sales tax amount is posted to the accounts payable sales tax account.

Use tax indicates that the company is responsible for tracking and paying the tax on items purchased. The vendor does not charge the tax; however, the company must record the tax and pay it on receipt of the invoice from the vendor. Use tax does not increase the invoice total. Individual lines can be flagged as taxable for use tax.

Example 5:

In the following posting, assume that use tax is selected on the first line of the purchase order. Only a receipt of goods with invoice is shown; this example would also apply when entering a receipt of goods, receipt of invoice, receipt of invoice with a variance, or when there is a nonrecoverable percent.

If posting with the Expense to Vendor/Item check box selected in Sales Tax Code Maintenance:

G/L Account	Debit	Credit
Inventory Item #1	660.00
Inventory Item #2	440.00
Accounts Payable		1040.00
A/P Use Tax	55.00	60.00
	1100.00	1100.00

 

If posting with the Expense to Vendor/Item check box cleared in Sales Tax Code Maintenance:

G/L Account	Debit	Credit
Inventory Item #1	600.00
Inventory Item #2	400.00
A/P Sales Tax	40.00
Accounts Payable		1040.00
A/P Sales Tax	60.00
A/P Use Tax	______	60.00
	1100.00	1100.00