Accounting for Received Purchase Orders
A purchase order has no accounting impact until the ordered items are received.
Using Advanced Receiving, you can receive and bill your purchase orders in separate steps. Your inventory and accounting records are affected when a purchase order is received and billed.
NetSuite uses the Accrued Purchases account to offset your A/P register. Using this account balances your A/P register for inventory that has been received but not paid for.
You can address discrepancies in quantity, price, and exchange rate between purchase orders, bills, and receipts by posting vendor bill variances. For more information, see Vendor Bill Variances.
When a purchase order is received:
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An Item Receipt is issued.
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Your inventory is updated with new on-hand quantities.
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The total value of the inventory received is entered in your Accrued Purchases account.
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The purchase appears on Vendor/Purchase reports, but does not appear on the Open Bills report.
When a received order is billed :
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The purchase appears on the Open Bills report.
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The Accrued Purchases account is listed in the Account column.
When the bill is paid:
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The total value of the billed inventory is entered in your A/P Register.
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The transaction is considered closed.