Receipts Accrual Overview

Receipts Accrual is a feature that triggers postings to the General Ledger (GL) to book the accrued liability for stock received, book the cost of landing charges absorbed and book the increase to Inventory at the point of receiving instead of when the Supplier's Invoice is posted in the Accounts Payable (AP) system.

As well as interfacing to the GL, the Print Receiving Register (PO64) program writes details of each Receipt to the Receipts Accrual Detail file where they remain with a status of 'unmatched' until the Receipt is on-line matched to the Supplier's Invoice in Enter Invoices (AP30).

The Receipts Accrual system is activated in Company Control Initialization (CC00/Purchasing). The GL control accounts used when Receipts Accrual is activated are outlined in the following table:

The Enter Receipts & In-Transits (PO60) program assigns a Receipt number to each Receipt; this becomes the link between the Purchasing (PO) and AP systems. The Receipt number is used to recall Receipts to match up to Supplier Invoices in AP30.

The accrual process starts when the Product is Received. By Receipt, each Product's domestic equivalent cost and landing charges are calculated. The interfacing GL entries are composed, reported on PO64 and posted to the GL. The entries that flow out of PO64 are:

• DR Inventory - for landed cost of the Product (domestic cost plus Landing Charges)
• CR Receipts Accrual - for domestic cost of the Product
• CR Landing Cost Absorbed - for the domestic value of the Land Charges

When the Supplier's Invoice is received, the Invoice Header details are entered in AP30/Header and the program automatically move to AP30/Receipt Lines where the Invoice's Receipt number(s) are entered to initiate the matching process. Note: Receipts may still be queried in Supplier/Receipt number, Supplier/Packing Slip number or Receipt number/Supplier sequence if the Receipt number is unknown. The Packing Slip number is captured by PO60.

After entry of a Receipt number in AP30/Receipt Line, the details of the Receipt are listed. You must identify the Receipt lines that are on the Supplier Invoice (either individually or via the 'Apply All Lines' option) and apply the lines to the Invoice. The variance between the Invoice gross amount and the applied Receipt lines automatically displays. If there is no variance or if the variance is minimal, then you may choose to process the Receipt without verifying each detail line. Any difference is distributed to a Variance account entered by the Operator in AP30/GL Distribution.

The entries that flow out to the GL are:

• CR Accounts Payable - for the value of the supplier's invoice.
• DR Receipts Accrual - automatically generated for the receipt amount originally put into the account by PO64.
• DR/CR Receipt Variance - manually entered for any variance to an account entered by the operator.

If the variance is significant, you can open AP30/Receipts Accrual and begin a detailed on-line matching process. Discrepancies in quantities and prices can be entered or the Invoice line extension can simply be entered. Upon completion of entering the discrepancies, GL distribution entries are automatically generated, the same as above, except the value of the corrections entered is automatically posted to the Receipt Variance account defined in CC00/Purchasing.

Two report formats are available for Receipts Accrual Reports (AP35):

• Unmatched Receipts Accruals - Reports from the Receipt Accrual Detail file all Receipts that have not yet been matched up to an AP Invoice. This report should reconcile to the Receipts Accrual control account in the General Ledger.

• Receipt Accrual Variances - Reports variances between the Receipt amount and Invoiced amount that were captured as a byproduct of the detailed matching process in AP30/Receipt Accruals. This report can be used to analyze the balance in the Receipts Variance account.

In the event that an AP Invoice was posted but not matched up to the associated Receipt or a Receipt was processed by mistake, then Cancel Receipts Accrual (AP36) is used to cancel the Receipt details. The domestic cost of the Product is automatically debited out of Receipts Accrual (i.e. what was put in is automatically taken out). The offsetting credit is entered by the Operator.

The Cancelled Receipts Journal (AP37) points to an audit of all cancelled Receipts Accrual, the interfacing GL entries are posted and the Receipt is removed from the Receipt Accrual Detail file.