The Credit flag on the Purchase Order Viewer enables you to create a credit purchase order. A credit purchase order is used as a memo reminder to Accounts Payable. It will notify the user of an existing CREDIT purchase order in the system during the voucher entry in the A/P journal.
A credit purchase order adjusts the quantity on-hand upon release.
Credit PO items must be received on the PO. Do not use the inventory receipts journal on credit po’s.
G/L entries are not generated until the credit purchase order is vouchered.
Changing an Existing PO to Type Credit
The Credit flag must be set while the record is in Add mode (unless allowed via registry). If you have created and saved a Purchase type PO in error, it should be canceled and a new Credit PO created.
A purchase order PO #1000 is generated to vendor ABC for 100 widgets. Widget inventory will show On-order for 100.
Your company receives all 100 widgets into inventory. This relieves On-order inventory for 100 and increase On-hand inventory by 100. No G/L transactions are generated.
Later it is determined that 25 widgets will be sent back to vendor ABC.
A CREDIT purchase order PO #1005 is generated to vendor ABC for 25 widgets. This will adjust your quantity on hand by –25. No G/L transactions are generated at this time.
Your company receives an INVOICE from vendor ABC for 100 widgets. As you voucher the invoice you are notified of the existence of a CREDIT purchase order. G/L will debit Inventory for the total amount and credit A/P.
Your company receives a Credit memo from vendor ABC for 25 widgets. You voucher the Credit purchase order. G/L transactions will be generated to debit A/P and credit a user specified G/L account (the default will be the Inventory account from the item’s inventory group).
A purchase order PO #1000 is generated to vendor ABC for 100 widgets. Widget inventory will show On-order for 100.
Your company receives all 100 widgets into inventory. This relieves On-order inventory for 100 and increase On-hand inventory by 100. Unvouchered payables will be credited for the total amount and inventory will be debited.
Later it is determined that 25 widgets will be sent back to vendor ABC.
A CREDIT purchase order PO #1005 is generated to vendor ABC for 25 widgets. This will adjust your quantity on hand by –25. No G/L transactions are generated at this time.
Your company receives an INVOICE from vendor ABC for 100 widgets. As you voucher the invoice you are notified of the existence of a CREDIT purchase order. G/L will debit Unvouchered payables for the total amount and credit A/P.
Your company receives a Credit memo from vendor ABC for 25 widgets. You voucher the Credit purchase order. G/L transactions will be generated to debit A/P and credit a user specified G/L account (the default will be the inventory account from the item’s inventory group).