Accrued Purchase vs. Accounts Payable?

[Jason]

GP8.0, SP3, SQL2000

Hi,

Our system is currently set up to use Accrued Purchases. I believe it works
like this:
We create a PO
Once it is received it becomes an accrued purchase
Once it is matched to an invoice it becomes a payable.

My question is this:
The accrued purchase is really a Payable as far as we are concerned. And it
doesn't appear that the accrued purchase shows up in the payables aging, so
we have less visibility into how much we actually owe.

I was wondering if we could change our set up so that receiving a PO went
straight to the Accounts Payable account, skipping the Accrued Purchases
account.
What would the ramifications of this be?
And how could I do this?

Thanks,
Jason

[Victoria [MVP]]

Jason,

While you can change the account number, you cannot change the fact that a
shipment received will not be part of the AP subledger or the AP aging until
you match it to the invoice. So all you'd be achieving with changing the
Accrued account number to Accounts Payable is the same thing that you can do
by manually adding the 2 accounts at any time.

The only thing I can suggest is entering the shipment/invoice combination at
the same time (so instead of Shipment, enter Shipment/Invoice), this would
go to the AP subledger right away, be part of the AP aging and would hit the
AP account completely bypassing the accrual step. The only thing you lose
with this approach is the ability to make changes when the invoice is
received if it is different from what you've already posted.
--
Victoria Yudin
GP MVP

Post by Jason
GP8.0, SP3, SQL2000
Hi,
Our system is currently set up to use Accrued Purchases. I believe it works
We create a PO
Once it is received it becomes an accrued purchase
Once it is matched to an invoice it becomes a payable.
The accrued purchase is really a Payable as far as we are concerned. And it
doesn't appear that the accrued purchase shows up in the payables aging, so
we have less visibility into how much we actually owe.
I was wondering if we could change our set up so that receiving a PO went
straight to the Accounts Payable account, skipping the Accrued Purchases
account.
What would the ramifications of this be?
And how could I do this?
Thanks,
Jason

[Richard L. Whaley]

Jason,

Accrued Purchases are, as I am sure you know, un-vouchered payables. The
amounts cannot age since the terms, while often standard per the vender, are
not actually conveyed to your firm until you receive the vendor's invoice.
Your financials should show the unvouchered payables so that you know your
total liabilities but you cannot properly age these amounts.

It is important that the AP account only reflect the amounts in vouchered
payables. This allows you to balance ageing reports with the GL account to
ensure that both are in sync and no mistakes are made. The unvouchered or
Accrued Purchases account must reconcile to the Received/Not Invoiced report
under Reports->Purchasing->Analysis. This report will give you complete
visibility of the amounts in the Accrued Purchases Account.

Dont change your accounting. You are doing it right!

Richard L. Whaley
Senior Business Consultant
321-277-1341

btw.....there is some good information that might be helpful to you in some
books on Dynamics GP/Great Plains available at
http://www.AccoladePublications.com

Post by Jason
GP8.0, SP3, SQL2000
Hi,
Our system is currently set up to use Accrued Purchases. I believe it works
We create a PO
Once it is received it becomes an accrued purchase
Once it is matched to an invoice it becomes a payable.
The accrued purchase is really a Payable as far as we are concerned. And it
doesn't appear that the accrued purchase shows up in the payables aging, so
we have less visibility into how much we actually owe.
I was wondering if we could change our set up so that receiving a PO went
straight to the Accounts Payable account, skipping the Accrued Purchases
account.
What would the ramifications of this be?
And how could I do this?
Thanks,
Jason