Extended Sales and Purchase ScenariosLesson 9

Processing Purchases with Billing Before Receipt

Back to D200: Inventory Order Management Extended Scenarios

Lesson 9: Processing Purchases with Billing Before Receipt

Part 3: Extended Sales and Purchase Scenarios

This lesson explains how you can process an accounts payable bill before the ordered stock items have been

received by your company.

Purchases with Billing Before Receipt: General Information

In Acumatica ERP, you can process purchases in which the bills are received and need to be paid before the vendor ships the ordered goods.

Learning Objectives

In this lesson, you will do the following:

  • Create a purchase order with stock items
  • Prepare an accounts payable bill for the purchase order
  • Prepare and release a purchase receipt and the related inventory documents

Applicable Scenario

In your organization, if bills are received from some vendors and entered into the system before the purchased goods arrive or if bills are imported from a third-party system, you can establish a workflow in which an accounts payable bill can be processed before the ordered items have been received. In this case, the purchasing process typically includes entering a purchase order, preparing a bill for the vendor, and then, when the purchased items are received to inventory, processing the purchase receipt.

Purchasing Process with Billing Before Receipt

In general, the Purchase Orders (PO301000) form is the starting point for creating a purchase order. In Acumatica ERP, purchase orders of the Normal type are used for the processing of purchases of inventory items with billing before receipt. In a new purchase order created on the Purchase Orders form, you first select the vendor. Then on the Details tab, you list the stock items to be purchased from the vendor. You can add stock items by clicking the Add Items button on the table toolbar of this tab and selecting from only the vendor's items or from the entire list of stock items. Then you need to create a bill on the Bills and Adjustments (AP301000) form to increase the vendor's balance in the system by the amount to be paid for the goods. You can release the prepared bill at any time—before or aer the processing of the receipt of the ordered items. Once the purchased items have been received to inventory, you create a purchase receipt (or multiple partial receipts) on the Purchase Receipts (PO302000) form. When a purchase receipt is released, the system automatically generates a corresponding inventory receipt on the Receipts (IN301000) form, with the date and posting period copied from the purchase receipt. On release of the inventory receipt, the system updates the inventory on hand with the quantity and cost of the received goods, and generates a batch of GL transactions to update account balances in the general ledger. If all the lines in the purchase order have been received and billed in full, the system assigns the purchase order the Closed status. For more information on the rules that affect line closing and completion, see Stock Item Lines in Purchase Orders, Non- Stock Lines in Purchase Orders, and Service Lines in Purchase Orders.

Vendor Setting for Billing Before Receipt

You can create an AP bill before the corresponding purchase receipt for a purchase order in both of the following cases:

  • If on the Vendors (AP303000) form, the Allow AP Bill Before Receipt check box is selected for the vendor specified in the purchase order
  • If on the Vendor Locations (AP303010) form, the Allow AP Bill Before Receipt check box is selected for the vendor location selected in the purchase order When a purchase order is created on the Purchase Orders (PO301000) form and this vendor or vendor location is selected, the state of this check box is copied to the check box of the same name on the Other tab of the form.
           If the Allow AP Bill Before Receipt check box is selected for a purchase order, you can also use
       the inventory purchase workflow in which the purchase receipt is processed and then the AP bill
       is prepared; the check box merely determines whether it is permissible to create the AP bill before
       the corresponding purchase receipt is created. For a description of the workflow with the receipt
       processed before the related bill, see Purchases of Stock Items: General Information.

Workflow of a Purchase with Billing Before Receipt

The following diagram represents the general workflow of the processing of a purchase order in Acumatica ERP, in which a bill is processed before the purchased items are received to inventory. Purchases with Billing Before Receipt: Process Activity

In this activity, you will learn how to process a purchase of stock items if the accounts payable bill from the vendor is received before the goods have been delivered.

Story

Suppose that you, acting as purchasing manager Regina Wiley, order a large quantity of labeled paper bags and jar labels for SweetLife’s needs. The Wingman Printing Company vendor, from which these goods were purchased, sent a bill to SweetLife, which received the original paper bill before the goods were delivered to the warehouse of the company's main office. You need to enter the purchase order, enter the accounts payable bill for the purchase order, and later, when the goods arrive to the wholesale warehouse, create and process a purchase receipt related to the purchase order.

Configuration Overview

In the U100 dataset, for the purposes of this activity, the following tasks have been performed:

  • On the Enable/Disable Features (CS100000) form, the following features have been enabled:
  • Inventory and Order Management, which provides the standard functionality of inventory and order management
  • Inventory, which gives you the ability to maintain stock items by using forms related to the inventory functionality and to create and process sales and purchase documents that include stock items
  • On the Vendors (AP303000) form, the PRINTICO (Wingman Printing Company) vendor has been created. The Allow AP Bill Before Receipt check box has been selected for the vendor on the Purchase Settings tab.
  • On the Vendor Locations (AP303010), for the MAIN location of the PRINTICO vendor, the Allow AP Bill Before Receipt check box has been selected on the Purchase Settings tab.
  • On the Stock Items (IN202500) form, the PAPERBAG and LABELS stock items have been created.

Process Overview

In this activity, to process a purchase order with billing before the items have been received, you will first create the purchase order on the Purchase Orders (PO301000) form and add the purchased items to it. You will then create an accounts payable bill for the vendor on the Bills and Adjustments (AP301000) form and release the bill. When the ordered items are received, you will create a purchase receipt for them on the Purchase Receipts (PO302000) form. On release of the purchase receipt, the system generates a corresponding inventory receipt to reflect the receipt of the items to inventory, which you will review on the Receipts (IN301000) form.

System Preparation

Before you start processing a purchase order with billing before the items have been received, you should do the following:

  1. In the info area, in the upper-right corner of the top pane of the Acumatica ERP screen, make sure that the business date in your system is set to today’s date. For simplicity, in this activity, you will create and process all documents in the system on this business date.
  2. On the Company and Branch Selection menu, in the top pane of the Acumatica ERP screen, make sure the SweetLife Head Office and Wholesale Center branch is selected.

Step 1: Creating the Purchase Order To create a purchase order, which includes labeled paper bags and jar labels, for the Wingman Printing Company, do the following:

  1. On the Purchase Orders (PO301000) form, add a new record.
  2. In the Summary area, specify the following settings:
  • Type: Normal
  • Vendor: PRINTICO
  • Description: Order of labels and paper bags
  1. On the Details tab, add rows with the settings listed in the following table.
        Branch                 Inventory ID          Warehouse             Order Qty.            Unit Cost

    HEADOFFICE             LABELS                WHOLESALE             40                    7.49

    HEADOFFICE             PAPERBAG              WHOLESALE             25                    16.70
  2. Review the Other tab, and notice that the Allow AP Bill Before Receipt check box is selected. This setting, which was specified for the PRINTICO vendor on the Vendors (AP303000) form, means that you can create the accounts payable bill for the purchase order even though the purchase receipt has not yet been entered for the purchase order.
  3. On the form toolbar, click Remove Hold. The system saves the purchase order.

Step 2: Processing the Accounts Payable Bill To create an accounts payable bill for the purchase order, do the following:

  1. While you are still viewing the purchase order on the Purchase Orders (PO301000) form, click Enter AP Bill on the More menu. The system generates an accounts payable bill (to which it copies the vendor of goods, the details, and other relevant information) and opens the created document on the Bills and Adjustments (AP301000) form.
  2. Review the details of the created bill. In a production environment, you would make sure that the details of the bill created in the system correspond to the details of the paper document that was received from the vendor.
  3. On the form toolbar, click Remove Hold.
  4. Click Release.

Step 3: Processing the Purchase Receipt To create the purchase receipt for the purchase order, do the following:

  1. Return to the purchase order for PRINTICO on the Purchase Orders (PO301000) form, which still has the Open status, and review the PO History tab. Notice that the details of the bill are shown in the right table.
  2. On the form toolbar, click Enter PO Receipt. The system prepares the purchase receipt for the selected purchase order, with all lines and other relevant settings copied, and opens it on the Purchase Receipts (PO302000) form.
  3. Make sure that the purchase receipt has the Balanced status, save the purchase receipt, and review its details. Notice that on the Billing tab, the bill that you have created is listed.
  4. In the Summary area, make sure that the Create Bill check box is cleared (because you have already created a bill for the entire quantity).
  5. On the form toolbar, click Release.
  6. On the Other tab, click the IN Ref. Nbr. link, and review the details of the generated inventory receipt, which the system opens on the Receipts (IN301000) form in a pop-up window. Make sure that the inventory receipt has the Released status.
  7. Return to the purchase receipt on the Purchase Receipts form, and on the Orders tab, review the information about the related purchase order, and make sure it now has the Closed status, as shown in the following screenshot. Figure: The line with the closed purchase order on the Purchase Receipts form