Clearing purchase over-receipts without invoicing

KWevick

I have a client with a mod to allow them to over-receive on a purchase order. Their vendors are allowed to send up to 10% over on specific products, which is not unusual. The problem occurs when they receive a quantity greater than the packing list quantity. For example, they order 100, the packing list from the vendor shows 105, but they actually receive 106. They invoice the 105, but currently the extra 1 is left out in never-never land. They don't want to $0 invoice, because they don't want the vendor to see this on a statement or have someone print off a report or something with a $0 invoice, but they do want to keep their inventory correct. They are a standard cost site, so of course their inventory reconciliation tends to be off too. Has anyone else dealt with this?
We are looking at ways to do this, but would welcome some input on tested solutions.
Thanks

Savatage

Would a Positive Adj. made in the Item Journal solve your problem?

KWevick

It might, if they wanted to go that way, but they want to see it on the P.O. Thanks anyway, it was a good suggestion.
Karen

Alex_Chow

The proper way to do this is to add the extra received line as a separate line and receive and invoice at 0 cost.

This way, there won't be any quantities in limbo and you won't have problems matching the purchase invoice to A/P.

David_Singleton

KWevick wrote:

I have a client with a mod to allow them to over-receive on a purchase order. Their vendors are allowed to send up to 10% over on specific products, which is not unusual. The problem occurs when they receive a quantity greater than the packing list quantity. For example, they order 100, the packing list from the vendor shows 105, but they actually receive 106. They invoice the 105, but currently the extra 1 is left out in never-never land. They don't want to $0 invoice, because they don't want the vendor to see this on a statement or have someone print off a report or something with a $0 invoice, but they do want to keep their inventory correct. They are a standard cost site, so of course their inventory reconciliation tends to be off too. Has anyone else dealt with this?
We are looking at ways to do this, but would welcome some input on tested solutions.
Thanks

Translated into English does this mean they don't want the Vendor knowing about the extra item because they don't want to pay for it?

KWevick

I know Alex, if it were only that easy to convince the client. Why? See David's comment after yours. Thanks both of you.
Karen

Alex_Chow

They want it on the PO but they don't want it to show when reconciling with the vendor? Interesting... :-k

Nonetheless, I'm guessing this will need to be a mod on the reconciliation process with the vendor to identify what needs to be sent and what is not.

David_Singleton

I have seen this request a number of times. Its quite common where a distributor or retailers purchases whole batches direct form the manufacturer. The production process is not exact and so there are often overages and underages. Because of this often the Manufacturer is not certain what they shipped. So it normally works that if the manufacturer ships less than what is on the POD, then the customer screams for a credit on the invoice. But if they ship too many, then it is subtly over looked.

In the cases I have seen, the financial amounts are trivial, and the customer spends more on work-a-rounds and training their users than if they just told the vendor the truth. Unfortunately some people just have it in their blood.

kapil4dynamics

Man this goes off topic

but they have copied the look and feel of each other when it comes to Ax 2009 and NAV 2009 but they didn't add this kinda stuff in NAV which is by default feature in Ax.

Because in business sense it can be taken as receipt of as non-billable complimentary item.

Buy 100 and "on receipt" u know how much free not fixed but 100 get 2

But i think in this case u can have an extra line of item with 100% discount. Even after doing this u will have to see ur reports how they want to have a look at.

KWevick

Actually the plot thickens. Most of the time it is done with agreement by the vendor, but they don't want to deal with the credits, etc. and much of the time the A/P department won't know what's going to be no-bill until later. We're generally talking machined stuff. Sometimes the packing slip lists the overage and sometimes it doesn't.

What they want to do is kill the PO once they're certain there will be no more invoices for it, even though they have qty to invoice outstanding. They seem to know their financial impact and what accounts to clear (don't ask me how). Besides the G/L posting issues, if the customer is willing to take the hit on that and manually clear it, does anyone see any other issues with deleted the PO (or archiving it)? This would be from a system structure standpoint. If the CFO says he has the G/L handled, who am I to argue? :roll:

Thanks much
Karen

themave

KWevick wrote:

Actually the plot thickens. Most of the time it is done with agreement by the vendor, but they don't want to deal with the credits, etc. and much of the time the A/P department won't know what's going to be no-bill until later. We're generally talking machined stuff. Sometimes the packing slip lists the overage and sometimes it doesn't.

What they want to do is kill the PO once they're certain there will be no more invoices for it, even though they have qty to invoice outstanding. They seem to know their financial impact and what accounts to clear (don't ask me how). Besides the G/L posting issues, if the customer is willing to take the hit on that and manually clear it, does anyone see any other issues with deleted the PO (or archiving it)? This would be from a system structure standpoint. If the CFO says he has the G/L handled, who am I to argue? :roll:

Thanks much
Karen

since you are standard cost, why not adjust the total amount for the invoice amount, record the invoice for the whole thing, it will record the positive purchase variance, which is what this is. your inventory will be correct. the vendor doesn't see qty you booked, when you pay him he see on the check voucher the invoice being paid and the amount.

so if you order a 100 at $10 for a total of a $1000, and you get 102 and still pay $1000 it just means you only paid 9.8 each.

when post the invoice, you will debit inventory for $1020, credit purchase variance for $20 and credit the vendor ledger for $1000. Not sure why you are changing anything. just record it exactly as it is.