Processing Purchase Receipts

During purchase receipt processing in Purchase Order Receipts (5.13.1) or PO Shipper Receipt (5.13.20), a pending invoice record is created for each logistics charge associated with a purchase receipt that is your responsibility.

Note: PO Fiscal Receiving (5.13.16) does not perform a PO receipt or create pending invoices. After using this program to set up a shipper, you must use PO Shipper Receipt to actually receive the items on the shipper.

Receiving PO line items:

When a pending invoice is created in Purchase Order Receipts, the receiver number is used as the internal reference and the packing slip number is used as the external reference. Pending invoices created in PO Shipper Receipt use the shipper number as the internal reference and the carrier shipment reference from the PO shipper as the external reference.

For each PO line received into inventory, the system checks each cost element for that line item in the Material or Overhead category in the GL cost set. If the cost element is linked to a logistics charge code belonging to the PO terms of trade and the charge is your responsibility, a pending invoice is automatically created for that logistics charge.

The logistics charge accrual value is calculated as follows:

Accrual Value = PO line receipt quantity * logistics charge cost element value

Note: Only one pending invoice is created for each logistics charge associated with a purchase receipt. When the same logistics charge is linked to another line item cost element, a detail line is added to the pending invoice for that logistics charge and the accrual value is updated.

For example, if a shipper contains 5 POs and each PO contains 10 line items that are each subject to freight and duty charges, PO Shipper Receipt creates two pending invoices—one for freight and one for duty. Each pending invoice will contain 50 detail lines.

In addition to the GL transactions created during PO receipt for item material cost, the following GL transactions are created for each PO line received with an associated logistics charge:

• Credit the inbound Accrual account for the logistics charge, product line, site, and supplier type for the same amount.

For example, a PO line item with a freight cost of $1 per item is received in a quantity of 50. Inventory is debited $50 and the inbound accrual account associated with the freight logistics charge is credited $50.

Note: The system always uses the base currency as the accrual currency for inbound logistics charges.

If the tax code associated with a logistics charge has Accrue Tax at Receipt set to Yes in Tax Rate Maintenance (2.13.13.1), the system creates the following GL transactions:

• Debit AP Tax Recoverable for the logistics charge tax accrual amount.

• Debit the inbound Variance account for the logistics charge tax variance amount.

• Credit the inbound Accrual account for the tax accrual and tax variance amounts.

The tax accrual and tax variance values are calculated as follows:

Tax Accrual = PO line receipt qty * logistics charge cost element value * tax rate * percent recoverable

Tax Variance = PO line receipt qty * logistics charge cost element value * tax rate * (1 - percent recoverable)

When a PO line item is returned for credit or replacement, the system does not reverse the original accrued value of the logistics charges. This is because some logistics charges, like freight or insurance, could be payable to a third-party supplier regardless of whether the items are returned.

When PO line items with associated logistics charges are returned using Purchase Order Returns (5.13.7), the system creates the following GL transactions:

Note: If you enter the wrong data, correct it by entering negative quantities to be received in PO Reciept (5.13.1). The system will then reverse the related logistics charges accordingly based on the amount in the last logged receipt for that order.