Inventory Accrual Account Interim

Beatrice

Hi,

One of our customer is having the following problem:

All purchase receipts and purchase returns have been invoiced.

User navigates to the Chart of Account window, selects the Invt Accrual Account Interim, then click on Balance > GL Account Balance.

When viewing the GL Account Balance by month, he finds there are debit and credit balances for previous periods although everything have been invoiced.

They are drafting their accounts for the year ending 30 June 2007 and they want to clear these balances on the Inventory Accrual Account Interim up to 30 June 2007.

Is it feasible to enter a journal to clear these balances on the Inventory Accrual Account when all purchases have invoiced?

Please advise.

Thanks and Regards,
Beatrice.

AdamRoue

If you are viewing these monthly you are creating a false impression, the accrual is populated between receipt and invoice. You also have to consider other entries. If you blindly enter a journal you are not correcting anything, you are just making the figures read what you want.

So assuming EVERY order is invoiced what is in the accrual account now. If there is a balance what is the cause of the entries - system generated or manual.

Beatrice

Hi,

Thanks for reply.

When I look at the ledger entries for a particular period, I find only invoice entries (system generated entries). So that the GL Account Balance for that period is Debit.

On the other hand, I have Credit Balances for other periods, where there are both receipts and invoices.

In my opinion, I think that users have not done invoice/receipt matching on the system, that is why the balances are showing as credit for this period.

I have also noted that users have done manual entries in the Invt Accrual Interim Account.

Any suggestion please because when the user is running his TB for the year ending 30 June 2007, the Inventory Accrual Account Interim is still showing a balance, which should not have been the case.

Thanks and Regards,
Beatrice.

AdamRoue

Hi

I am afraid this is accounts, your "opinion" needs to be backed up with hard facts If you feel this account should be 0 at the end of June 2007 you are saying there are no manual entries and EVERY receipt was invoiced.

If this is true the first thing you need to do is analyse every manual entry, discover why it has been made, what the double entry is, and if necessary reverse it.

If they have not been receipt and invoice matching then is the stock duplicated? If you receive something in it will create a GRNI position. If you invoice it separately then you book in the stock again.

Has the business changed processes, altered posting groups, altered the setup?

You need to find out when this started, what has altered etc.

There is no quick fix to this, you need to find the issues and correct them.