Accrual Write-offs
If you choose the Perpetual Accrual Method within Purchasing, Purchasing records an accounts payable liability to an AP accrual account for goods received but not invoiced. When Payables matches and approves the invoice for the received goods, Payables clears the accounts payable accrual account and records the actual liability amount to the invoice accounts payable liability account.
After you have entered your receipt transactions and matched and approved your invoices, you can run the Accrual Reconciliation Report to identify any differences between your Purchasing receipts and Payables invoices. With this report, you can identify the following problems with receiving, purchasing, inventory, work in process, or accounts payable transactions:
- Quantities differ between receipts and invoices
- Incorrect purchase order or invoice unit prices (previous releases only)
- Discrepancies in supplier billing
- Accounts Payable clerk matched an invoice to wrong purchase order or wrong purchase order line
- Receiving clerk received against the wrong purchase order or wrong purchase order line
- Miscellaneous inventory or work in process transactions that do not belong to the accrual accounts
- Payables entries for sales tax and freight that do not belong to the accrual accounts
After you have researched the reported accrual balances, you can use the Accrual Write-Offs window to indicate which entries you wish to write off and remove from the Accrual Reconciliation Report. Submit the Accrual Write Off Report, which lists the transactions you marked in the Accrual Write-Offs window, and use it to support a manual journal entry to write off listed transactions.
Writing Off Accrual Transactions
Prerequisites:
Payables and Purchasing are installed.
Define your transactions reasons in Inventory's Transaction Reasons window. This gives you a means of classifying your write-offs so you can record them in separate accounts when you record a manual journal entry to write off these transactions. The Accrual Write Off Report provides a summary by transaction reason. See: Defining Transaction Reasons.
If you use Inventory and Work in Process, transfer to your general ledger transactions from these two sources.
To write off a transaction from an accrual account:
1. Submit the Accrual Reconciliation Report. Review this report and identify the transactions you want to write off. See: Accrual Reconciliation Report.
2. Select Accrual Write-Offs from the menu. Enter search criteria in the Write-Off Search Criteria region to find the transactions you want to write off:
- You can optionally enter the following additional search criteria: Account number, Item number, item Description, PO Number, Document Order Line, Document Number, Document Line, Destination Type, Quantity, and a date range. You can also restrict the search to include written off transactions and transactions matched to a purchase order.
3. Choose Find to initiate the search and display the results in the Write-Off Transactions region.
4. Select the transactions that you want to write off. Enter a Write Off Date that is in the same accounting period as the journal entry you will prepare to write off selected transactions.
5. Save your work. Transactions that you selected to write off in this window will no longer appear on the Accrual Reconciliation Report. They will appear on the Accrual Write Off Report, which is used to support your manual journal entry.
7. Using the Accrual Writeoff Report as support, prepare a manual journal entry for the transactions you wish to write off. Optionally prepare a journal entry line for each transaction reason.
See Also
Defining Accrual Options
Setting Up Inventory Accruals
Defining Purchase Order Receipt Accruals
Overview of Receipt Accounting
Reconciling A/P Accrual Accounts Balance
Accrual Process for Perpetual Accruals
