Expense Purchase Orders

Version: As of version 16.03

Purpose

Expense Purchase Orders are used for direct GL expenses (sometimes referred to as AP vouchers) and are usually entered when the invoice arrives from the Vendor. This type of Purchase Order can be used to pay utilities bills, freight expenses, and other administrative expenses. There is no need to receive material on this type of order, so the process allows that step to be skipped.

Security and Configuration

Security/Permissions

See your system administrator for the appropriate security access.

Configuration

Prior to creating a purchase order in Deacom, several pieces of master data, including pricing rules, will need to be setup. In most cases, companies will have already completed these set up steps during the implementation process. The required configuration setups are indicated below.

Chart of accounts - the accounts should be in the system at this point even though none will get hit during the order entry process. An AP Account is needed for an order to be saved.
Vendors must be entered into the system and validated.
Purchase Terms must be populated and are defaulted directly from the vendor record.
Facilities - Each purchase order is going to need to have a facility linked to the order for it to be saved
Ship To – These locations should be setup prior to entry of purchase orders (Usually the same as the facility).
Items - Every purchase order needs an item added to it and that item must have a purchase to account.
Freight Types/Ship Via - These should be set up before purchase order entry and can come directly from the vendor record.
"Max PO Dollars 1-3" - Set via Purchasing Options, these fields have security associated with them and can be used to limit the maximum dollar amount a Purchase Order may be created for.

Related Processes

Procedure

Navigate to Purchasing > Order Entry.
Select the appropriate Vendor. Note that the other header fields will be automatically populated after selecting a Vendor, but can be overridden if desired.
On the Misc 1 tab, confirm that the Ship-to and PO Search Fields are correct; if they are incorrect, modify them for this order. These fields can be modified up until the order is received.
On the Misc 2 tab, confirm the AP account is correct.
Click the "Add" button to begin adding parts to the Purchase Order.
Enter the following line details on the Edit Purchase Order Line form
1. Part Number: Leave empty for a direct GL Expense Purchase Order.
2. Vendor Part: Leave empty for a direct GL Expense Purchase Order.
3. Description: Enter a description of the GL expense. This field, and possibly the line notes, will be the only detail available which indicates why this Vendor is receiving payment, so be specific. For example, it will be obvious that this is an “Office Supplies” expense because the GL account chosen will be the Office Supplies expense account. Entering “Office Supplies” as a description provides no additional information, but entering “Copy Paper” or “New Desk for Bob” provides additional detail.
4. Charge To: The GL account that will be debited. Defaults to the expense account from the Vendor information, but can be changed. In both cases, the default account will be overridden by the Facility making the purchase. If the GL account is directly entered, it will not be overridden by the Facility.
5. Note: Chart Group Security can be used to control which groups of GL accounts can be used in this field by certain groups of users.
6. Quantity: Normally set to 1.
7. Unit Price: The invoice amount from the Vendor.
8. Extension: Read-only field that should display the amount to be paid to this vendor, charged to the expense account on this line.
Once all the information has been entered correctly, click "Save" and "Exit".
Navigate to the Dates tab and fill in the applicable date fields.
If there are multiple GL account codes that this invoice needs to be coded to, either because of different kinds of expenses, or different division or departmental allocations, enter as many additional lines as needed. Each line refers to the correct GL account, has a quantity of 1 and a unit price of the dollar amount to be charged to that specific GL account. When all lines are added, the total order amount should match the total amount of the invoice.
The "Invoice/Pre-Pay" flag on the Purchase Order header can be used to bypass the receiving process for these GL Expense Purchase Orders. If this option is selected and the order is saved, the system will automatically display the Invoice form.
When finished adding lines to the Purchase Order, click the "Save" and "Exit" buttons to save the last line added and close the Enter Purchase Order Line form.
Review the Purchase Order by checking the total order amount. Similar to checking the extensions on the Purchase Order lines, a review of the total order amount can detect errors in order entry or inconsistent pricing. Click the "Save" button to save the order.

Additional Information

How are discounts, adjustments, and deductions handled?

Using the Discount function - Discounts are defined on the terms that get assigned to the purchase order. When entering a Vendor discount users may choose to take the Terms-defined discount and/or apply additional discounts. If taking the Terms-defined discount, when entering Vendor invoices, ensure the "Take Discount" flag is checked. Note that the "Cash Discount" and "Net to Pay" fields will then automatically calculate. If a different discount amount should be taken, enter that amount in the "Cash Discount" field, which will update the "Net to Pay" field. Once the desired discount has been entered, click "Apply".

Using the Invoice Adjustments function - When entering Vendor invoices, select the Purchase Order to make an Adjustment to and click the "Adjustments" button. Click "Add" to select the desired part and verify the account, quantity, and amount of the adjustment line.

Note: Users must have security access set to "Yes" for the "Accounting -- purchase order adjustments" and "Purchasing -- change adjustment account" settings.

Using the Deductions function - After an order is invoiced, but prior to cutting a check, a deduction may be entered. If using the Check Run function, click the "Deductions" button, then in the Payment Deductions form, select an Account and enter a Deduction Amount then save. If using the Manual Checks function, click the "Modify Amount" button and enter a value in the "Set Total Amount" field then save.

Managing the purchasing process

How can the Purchasing process be controlled?

Using Work Flows - Deacom's Work Flow Reporting feature allows users to formalize approval processes and require specific steps to be completed before a transaction or a master data record can be completed. Work Flows give structure and visibility to tasks that are completed at different times and throughout departments within a company. The reporting that is available through Deacomhelps facilitate team work and collaboration across departments.

Configuring AP Security Settings - Restricting access to a part of Deacomis the easiest way to prevent a user from viewing or modifying data that they should not be. For more information on how to do this, refer to the Managing Users and User Security page.

Processing returns

How are product returns and debit memos handled?

Entering Purchase Orders with a negative quantity - For Expense Purchase Orders, the best option is using a debit memo. Debit memos are used when the items in on the Purchase Order will be kept, or otherwise disposed of, and the only adjustment needed in the system is the registering of credit owed by the vendor. When entering the Purchase Order, set the Facility to where the material is currently located. On the Purchase Order line, enter a description of the return rather than entering a Part Number then enter the "Charge To" account. The quantity is entered as a negative number. Next, enter the price the material is being returned for. This may be the same as the price that you originally paid for the material, or may be less, if the vendor deducts a percentage of the price originally paid for a restocking fee. Enter a dummy Vendor invoice and, if the check from the Vendor has already been received, select the "Print Check Now" flag to process the payment. If the payment has not been received, the payment can be processed later through Manual Checks or a Check Run.