3 Replies Latest reply on Aug 13, 2009 9:07 PM by Supro

    Purchasing Accruals on Closed Purchase Orders

    erik.young
      I am having an issue with Purchasing accruals being performed on a closed purchase order. The accrual does not appear in the Uninvoiced Transactions Register, but is accrued in the Purchasing journal entry nonetheless. The purchase order is "closed". I am trying to figure out why the amount is being accrued and how to stop the accrual. Anyone have any ideas? Is this a bug or should I try to "Finally Close" the PO?

      I also noticed that when this PO accrued in the first month, there were two accrual lines for the purchase order. One had a correct accrual of $67.20 and then there was a second line of $14.70 that was accrued for the PO. The $14.70 is the amount that has been continuing to accrue even though the PO has been "closed".

      This is in version 11.5.

      Thank you,
      Erik
        • 1. Re: Purchasing Accruals on Closed Purchase Orders
          Supro
          In PO summary please check the following fields for all shipments of that PO and post the details here.
          Fields to check quantity, quantity received, quantity billed, quantity cancelled, Cancelled flag (add from Folder >> Show Field).
          • 2. Re: Purchasing Accruals on Closed Purchase Orders
            erik.young
            Supro-

            Here are the details of the PO:
            Quantity = 1
            Qty Rec'd = 1
            Qty Billed = 1
            Qty Cancelled = 1
            Closure Status = Closed
            Cancelled (flag) = No flag

            When the PO was set up, it was set up for a price of $3,000 with a quantity of 1. However, we were billed by the vendor in multiple installments for the job, so we received the PO in fractions and applied invoices to the PO in fractions. I think there may have been a difference at some point between what was received and what was applied to an invoice (since the Receiver would receive one fraction (shown below) and the Payables analyst would match another fraction since Oracle only shows the fractions to 2 decimal places on the Receiving Transactions Register- which is what the Payables analyst is using). Here are the actual receipts (total equals 1):

            .321
            .13
            .1284
            .09
            .3306

            And here is what the Receiving Transactions Register shows:
            .32
            .13
            .13
            .09
            .33

            I think at some point there was a fractional difference causing the accrual issues. Do you think Finally Closing the PO would stop the accrual problem?

            Thanks,
            Erik
            • 3. Re: Purchasing Accruals on Closed Purchase Orders
              Supro
              Here are the details of the PO:
              Quantity = 1
              Qty Rec'd = 1
              Qty Billed = 1
              Qty Cancelled = 1
              Cancelled (flag) = No flag
              Hi Erik,
              interesting case ! Please note above. You have mentioned "Qty Cancelled = 1", is it a typo?

              Assuming that it is a typo error, I don't think finally closing it will solve the problem.

              Apart from quantity difference in received vs. billing there may be other cases like incorrect PO or invoice unit price, supplier billing discrepancies (since you have mentioned billing was in installments).

              I'll suggest the following checks first before taking any action. Please test in a cloned instance first

              - Run "Accrual Reconciliation Report" / "Accrual Rebuild Reconciliation Report" and check what is coming ... do you see the problematic entry
              - Check whether there are any other reasons apart from quantity received vs. invoiced mismatch
              - Try Accrual Write-Off option in Purchasing to clear that entry (refer PO
              - Pass a manual journal entry in GL
              For the last 2 steps consult with finance guys.

              You can use Accrual Write Off Report as reference for manual journal entry in GL.
              Once you are satisfied with the results, apply the solution in production with approval from finance.

              Another option could be to use a "dummy" invoice to match the remaining amount.

              Please let me know the results.

              Good luck!

              Thanks
              Supro