When an organization purchases the same items for resale and internal consumption, the purchase order line type you select will determine how the purchase is accounted for. The Description and Capital Equipment purchase order line types are used for purchases that will be used for internal consumption. Inventory purchase order line types are used for resale items.
When a receipt is recorded for a description type or capital equipment purchase order line type, an inventory transaction perpetual record is generated in order to produce a journal in FFA.
- The debit is made to the General Ledger account entered on the purchase order line.
- The credit is made to the AP Liability account.
The table below shows the fields for the Inventory Transaction Financial Records ITFRs
Allow you to track the financial transactions arising from acquiring, managing and selling inventory items. You can track information such as who was involved in the transaction, what the transaction was for, when and where it took place and why. This information can be sent to financial systems such as FinancialForce Accounting. You can also view Inventory Transaction Financial Records from the Perpetual with Financial report. and examples of the values that are expected for each of the new financial transactions created when an Inventory type purchase order is received. The values used on the purchase order line for this example are as follows:
- Quantity - 5
- Quantity received - 4
- Unit Cost - 10
- Total Cost - 50
The currency of the Inventory Control Point (ICP) the purchase order was shipped to is USD.
| Field | Description |
Financial Transaction 1 |
Financial Transaction 2 |
|---|---|---|---|
| GL Account | General Ledger Account | Expenses | AP Liability |
| ICP Currency | Currency of the Inventory Control Point (ICP) if used | USD | USD |
| ICP Unit Cost | Unit cost using currency of ICP | 10 | -10 |
| ICP Value Amount | Unit cost using currency of ICP X Quantity | 40 | - 40 |
| Quantity | Receipt Quantity | 4 | 4 |
| Trade Currency | Purchase Order Currency | USD | USD |
| Trade Unit Cost | Purchase Order line Unit Cost | 10 | -10 |
| Trade Value Amount | Purchase Order line Unit cost x Quantity | 40 | -40 |
The data for the Inventory Transaction Financial Records is populated from the purchase order lines.
Accrual Journals
Description and Capital Equipment type purchase order lines can be created with or without an item master. The following table shows which General Ledger account is used when the purchase order line is received:
| Item Master on Purchase Order Line? | GL Account on Purchase Order Line? | ITFR - Expenses | ITFR - Accrued Purchases |
|---|---|---|---|
| No | Yes | GL account on PO line | FFA GL account mapping |
| No | No | FFA GL account mapping | FFA GL account mapping |
| Yes | Yes | GL account on PO line | FFA GL account mapping |
| Yes | No | GL account mapping from the Product Purchase Analysis Account for the Item Master on the Purchase Order Line | FFA GL Account mapping |
Disabling Accrual Transactions
When an AP voucher associated with a purchase order line is fully matched, accrual transactions are disabled so there are no unnecessary accrual ITPR Inventory Transaction Perpetual Record. Historical records that allow you to track transaction history arising from acquiring, managing and selling inventory items. You can track information such as who was involved in the transaction, what the transaction was for, when, where it took place and why. You can also view Inventory Transaction Perpetual Records from the Perpetual with Financial report./ITFR Allow you to track the financial transactions arising from acquiring, managing and selling inventory items. You can track information such as who was involved in the transaction, what the transaction was for, when and where it took place and why. This information can be sent to financial systems such as FinancialForce Accounting. You can also view Inventory Transaction Financial Records from the Perpetual with Financial report. entries logged when purchases have been paid for and received. When a purchase order line is partially matched, accrual transactions will be created only for the unmatched quantity. This ensures the accounting entries are an accurate reflection of the purchases.
The system only creates new transactions for AP vouchers that have not yet been matched.
For example, if 5 purchase order lines are received but only 3 are matched, 2 ITPRs and 4 ITFRs are created for the 2 lines that are not matched. The quantity of items assigned to each line will not influence the number of transactions created for items that are not serial number or lot number controlled.
Serial number controlled and lot controlled quantities are split into different receipt lines during the receipt phase. How the quantities are split will determine the number of transactions created for the receipt lines remaining unmatched.
Serial Number Control
A separate receipt line is created each serial controlled item that is received. The quantity of transactions created is therefore different for serial number controlled items, unless the original purchase order has only 1 line and a line item quantity of 1. 1 ITPR and 2 ITFRs are created for each item that is subject to serial number control to reflect the number of unmatched AP voucher lines.
Lot Number Control
The quantity of transactions created for lot number controlled items also varies depending on how the total quantity of lot number controlled items is divided between the lots created when lot controlled items are received.
A new Receipt Line is created for each lot number when the purchase order is received. The lot number split is configured for each purchase order line immediately after the purchase order receipt is saved. The lot numbers and associated quantity details are always required when a purchase order line item is lot number controlled.
For example, a purchase order line with 12 lot controlled items divided into 3 lots will generate 3 ITPRs and 6 ITFRs if the associated AP voucher is not matched.
More than one AP voucher can be created for a single purchase order. Subsequent AP vouchers will display the remaining quantities to voucher.
Serial and Lot Number Controlled Tracking
To enable accurate tracking, the following fields display on each of the ITPRs created:
- Inventory transaction type
- Inventory Transaction Record Number
- Associated Purchase Order Line Item
- Receipt Line
- Lot Number
- Serial Number
- AP Voucher
The functionality ensures continued item tracking is available for serial number and lot number controlled items.
Crediting or Voiding AP vouchers
When an AP voucher with Description or Capital Equipment purchase order line types is credited or voided, financial transactions are created to reflect this to ensure the credit and void actions are accounted for correctly.
The following tables show how the financial transactions are recorded between the receipt of a description or capital equipment purchase order line and the credit or void action of the associated AP voucher.
Receive Purchase Order
Perpetual With Financial transaction = Receive Purchased Material
| ITPR |
ITFR 1 |
ITFR 2 |
|---|---|---|
|
Qty = Receipt Line Qty Receipt Line = associated receipt line Purchase Order Line Item = associated PO line |
GL Account = Expenses Qty = Qty of receipt line associated with PO line (POSITIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Unit cost of PO line converted to ICP Currency ICP Value Amount = Unit cost of PO line x Qty Trade Currency = Currency of PO Trade Unit Cost = Unit cost of PO line Trade Value Amount = Unit cost x Qty |
GL Account = Accrued Purchases Qty = Qty of receipt line associated with PO line(NEGATIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Unit cost of PO line converted to ICP currency ICP Value Amount = Unit cost of PO line x Qty Trade Currency = Currency of PO Trade Unit Cost = Unit cost of PO line Trade Value Amount = Unit cost x Qty |
Reverse Receipt Line
Perpetual With Financial transaction = Reverse Receive Purchased Material
| ITPR |
ITFR 1 |
ITFR 2 |
|---|---|---|
|
Qty = Receipt Line Qty Receipt Line = associated receipt line Purchase Order Line Item = associated PO line |
GL Account = Expenses Qty = Qty of receipt line associated with PO line (NEGATIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Unit cost of PO line converted to ICP currency ICP Value Amount = Unit cost of PO line x Qty Trade Currency = Currency of PO Trade Unit Cost = Unit cost of PO line Trade Value Amount = Unit cost x Qty |
GL Account = Accrued Purchases Qty = Qty of receipt line associated with PO line(POSITIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Unit cost of PO line converted to ICP currency ICP Value Amount = Unit cost of PO line x Qty Trade Currency = Currency of PO Trade Unit Cost = Unit cost of PO line Trade Value Amount = Unit cost x Qty |
Match AP Voucher Line
Perpetual With Financial transaction = Accrual Reversal
| ITPR |
ITFR 1 |
ITFR 2 |
|---|---|---|
|
Qty = Qty on AP voucher line Receipt Line = associated receipt line Purchase Order Line Item = associated PO line |
GL Account = Accrued Purchases Qty = Qty matched (POSITIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Unit cost of PO line converted to ICP Currency ICP Value Amount = Unit cost of PO line x Qty Trade Currency = Currency of PO Trade Unit Cost = Unit cost of PO line Trade Value Amount = Unit cost x Qty matched |
GL Account = Accounts Payable Qty = Qty matched (NEGATIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Unit cost of PO line converted to ICP currency ICP Value Amount = Unit cost of PO line x Qty Trade Currency = Currency of PO Trade Unit Cost = Unit cost of PO line Trade Value Amount = Unit cost x Qty matched |
Void AP Voucher Line
Perpetual With Financial transaction = AP Voucher Credit
| ITPR |
ITFR 1 |
ITFR 2 |
|---|---|---|
|
Qty = 1 Receipt Line = associated receipt line Purchase Order Line Item = associated PO line |
GL Account = Accrued Purchases Qty = Qty = 1 (NEGATIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Amount of AP voucher that's been voided in ICP currency ICP value amount = Amount of AP voucher that's been voided in ICP currency Trade Currency = Currency of PO Trade unit cost = Amount of AP voucher that's been voided in PO currency Trade value amount = Amount of AP voucher that's been voided in PO currency |
GL Account = Accounts Payable Qty = 1 (POSITIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Amount of AP voucher that's been voided in ICP currency ICP Value Amount = Unit cost of PO line x Qty Trade Currency = Currency of PO Trade unit cost = Amount of AP voucher that's been voided in PO currency Trade unit cost = Amount of AP voucher that's been voided in PO currency |
Credit AP Voucher Line
Perpetual With Financial transaction = AP Voucher Credit
| ITPR |
ITFR 1 |
ITFR 2 |
|---|---|---|
|
Qty = 1 Receipt Line = associated receipt line Purchase Order Line Item = associated PO line |
GL Account = Accrued Purchases Qty = Qty = 1 (NEGATIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Amount of AP voucher that's been voided in ICP currency ICP value amount = Amount of AP voucher that's been voided in ICP currency Trade Currency = Currency of PO Trade unit cost = Amount of AP voucher that's been credited in PO currency Trade value amount = Amount of AP voucher that's been credited in PO currency |
GL Account = Accounts Payable Qty = 1 (POSITIVE) ICP Currency = Currency of ICP related to warehouse of PO line ICP Unit Cost = Amount of AP voucher that's been voided in ICP currency ICP Value Amount = Unit cost of PO line x Qty Trade Currency = Currency of PO Trade unit cost = Amount of AP voucher that's been voided in PO currency Trade unit cost = Amount of AP voucher that's been credited in PO currency |