G/L accounts for P/O receiving, A/P vouchering and POP reporting¶
Adapted from the Leahy Consulting wall chart "How do I know what G/L accounts will be used for P/O receiving, A/P vouchering & POP production reporting?", February 2007. The original was a single-sheet Visio diagram; it is redrawn here so the text reflows and the entries can be read on a phone.
A purchased part travels through six stages between the purchase order and the finished item. Accounts are chosen at some stages and used at others, and the gap between the two is where most surprises come from — the accounts a purchase order will post to are decided when the order is created, not when it is received or vouchered.
Stage 1The purchase order is prepared
Macola® looks for a Material Cost Type/Location record for each item number. If none exists, it uses the default accounts in I/M Setup. The accounts it picks up are inventory, receiving accrual, and PPV cost and quantity.
These accounts are captured and stored in the purchase order record now — not during receiving or A/P vouchering.
No entries occur at this stage.
Job costingNo entries occur at this stage.
Stage 2Purchased items are received
Receiving creates the entries for the inventory and receiving accrual accounts. The account numbers come from the purchase order record written in stage 1.
| Account | DR | CR |
|---|---|---|
| Raw material inventory | X | |
| Receiving accrual | X |
No entries occur at this stage.
Stage 3The vendor's invoice is keyed and posted
A/P invoice entry takes most of the accounts from the purchase order record. For the A/P account, Macola® looks for the Vendor Type record for that vendor and falls back to the default A/P account in A/P Setup.
The entries are created during posting, not during entry.
| Account | DR | CR |
|---|---|---|
| Receiving accrual | X | |
| Accounts payable | X | |
| Purchase price variance | X |
If a job number was specified, entries are made in the Job Distribution and A/P Distribution files.
Stage 4The A/P check is printed and posted
At check posting, Macola® takes the cash account from the Vendor Type file for the vendor, falling back to the default in A/P Setup.
Accounting entries are created only during check posting — printing a check posts nothing.
| Account | DR | CR |
|---|---|---|
| Accounts payable | X | |
| Cash | X |
No entries occur at this stage.
Stage 5The production order is released
Individual parts are allocated to the production order according to the bill of material, and quantity adjustments can be made now. Nothing posts unless the option to issue inventory items and costs at release is chosen.
No entries occur at this stage.
Job costingNo entries occur at this stage.
Stage 6The item is manufactured
Macola® looks for a Material Cost Type/Location record for every component on the bill of material and for the finished item, falling back to I/M Setup. Value-added factors such as labor hours can be keyed at this point.
| Account | DR | CR |
|---|---|---|
| Raw material inventory | X | |
| WIP inventory | X |
| Account | DR | CR |
|---|---|---|
| Finished inventory | X | |
| WIP inventory | X | |
| Raw material inventory | X |
Entries are made in the Job Distribution and I/M Distribution files.
Why the timing matters¶
Two consequences follow from accounts being captured on the purchase order at stage 1.
Editing a Material Cost Type/Location record leaves open orders behind
Change the receiving accrual or PPV accounts in Material Cost Type/Location Maintenance and every purchase order already on file keeps posting to the old accounts. The change reaches only orders created afterwards. If the change has to apply to open orders, the orders have to be re-created — or the accounts corrected on each line. Our team can script this; call (513) 723-8094.
A check that is printed but not posted has not hit the general ledger
Only check posting creates entries. A batch printed on the last day of the month and posted on the first of the next lands in the following period.
Under standard costing the picture changes at receiving, because the purchase price variance is recognized earlier. See Standard costing and POP value-added costs.
Support & contact¶
Our team is glad to help with anything from a quick question to a full implementation.
- PULSE software support — (513) 723-8095 · [email protected]
- Sales & product questions — (513) 723-8091 · [email protected]
- Consulting & Macola services — (513) 723-8094 · [email protected]