How to Work with PO Accrual Balance

This report provides a detailed overview of purchase receipts, returns, and bills processed through purchase orders. It serves as a reconciliation tool between your purchase accrual account and general ledger, ensuring accurate financial records. Learn how to interpret the report and resolve any discrepancies to maintain a clear picture of your purchasing activities.

Purchase Accrual Balance by Period

The Purchase Accrual Balance by Period shows purchase receipts, purchase returns and AP bills that were created by using the purchase order functionality and posted to the inventory and AP subledgers. This form can be used to reconcile the purchase accrual account with the general ledger.

The balance on this report should match to the information on the general ledger, provided no journal entries have been made to the account outside of the usual inventory processes.

Occasionally you might see some aged transactions that need to be cleared from the Purchase Accrual Balance by Period report. Below are instructions on how to handle these types of updates and the general ledger impact to these entries.

Clearing unbilled PO Receipts that will not be billed by the Vendor

  1. Create an AP bill for the vendor listed on the receipt.
  2. Associate the purchase receipt(s) with the AP bill by selecting “Add PO Receipt” from the details tab.
  3. You may associate more than one receipt for the same vendor with a bill to save time on clearing out multiple purchase receipts.
  4. Update the Ext. Cost to zero for all lines.
  5. Confirm the bill is a zero bill.
  6. Save & release.

The zero bill will close the open PO receipts and remove them from the list on the Purchase Accrual Balance by Period.

The general ledger impact will be a net zero entry to Accounts Payable and Inventory Purchase Accrual/PO Clearing or

  • Accounts Payable – 0.00
  • Inventory Purchase Accrual/PO Clearing – debit amount of adjustment
  • Purchase Price Variance – (credit amount of adjustment)

Clearing unbilled PO Returns that will not be refunded by the Vendor

  1. Create an AP Debit Adj. for the vendor listed on the return.4
  2. Associate the returns with the debit adjustment by selecting “Add PO Receipt” from the details tab.
  3. You may associate more than one return for the same vendor with the adjustment to save time on clearing out multiple returns.
  4. Update the Ext. Cost to zero for all lines.
  5. Confirm the adjustment is a zero adjustment.
  6. Save & release.

The zero debit adj. will close the open PO returns and remove them from the list on the Purchase Accrual Balance by Period.

The general ledger impact will be as follows:

  • Accounts Payable – 0.00
  • IM Adj. & PO Var – debit amount of adjustment
  • Inventory Purchase Accrual/PO Clearing – (credit amount of adjustment)