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Suggested answer

Financial effects for Closing POs

Posted on by Microsoft Employee

Hello,

I need to know what's the financial effect to close Purchase order for delivery.Actually I have various POs as a open order in ax2012 however due to not receiving the pending qty I need to close them. They are from year 2017. Today if I close the PO from open order to invoiced what is the effects on Financial or on inventory. Please help.

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  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Financial effects for Closing POs

    Good morning Maira.j,

    Wanted to follow up on this thread and ask if you need any other help / support for this issue/question.

    Would be great if you could keep us updated.

    Many thanks,

    Ludwig

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Financial effects for Closing POs

    Hi Mairaj Ahmed,

    Let's make an example:

    You order 10 pcs for $100 / pcs.

    You receive 8 pcs and you post the invoice for $100 x 8 pcs = $800.

    If you 'play around' and receive the other 2pcs and post an invoice for $0 for those 2 pcs then your item cost prices fluctuate a lot and might lead to a deterioration in the inventory values. In my example you would have received 10 pcs for $800 or $80 / pcs.  That's a 20% lower value. At the end of the year usually the auditors check the price development in order to calculate and post some value adjustments. In my example they might come up and say that your whole inventory for this item is overvalued because prices dropped a lot recently...

    Therefore, the best option is to cancel out the rest just as Andre and Junaid mentioned.

    Best regards,

    Ludwig

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Financial effects for Closing POs

    Is there any effects in Financials and Inventory?

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Financial effects for Closing POs

    Thank u for the support. My concern is i had receive GRN and invoiced it. However due to having less qty received and invoiced as per original PO. it is in open status format. I need to closed the PO as Invoiced Status. I need to know if i cancel the remaining delivery from PO is there any effect in the financials or Inventory. Plz remeber these POs are from Year .2017 

    Regards,

    Mairaj Ahmed

  • Suggested answer
    Junaid Idrees Profile Picture
    Junaid Idrees 12,740 on at
    RE: Financial effects for Closing POs

    Hi Maira,

    If your PO is partially received and invoiced too then for remaining Qty. you can use "Delivery remainder" option from PO screen to cancel out the remaining Qty. and system will automatially change the status to invoiced.

    And if there are PO's against which you are not expecting to receive any Qty. then you can just simply select and cancel them and system will change the purchaes order status from OPEN TO CANCELED just to maintain the history instead of deleting them.

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 288,420 Super User on at
    RE: Financial effects for Closing POs

    Hi Maira,

    If you have POs where the lines were partially receipt, but the receipt quantity has been invoiced, you can cancel the delivery remainder. In that case, the PO's will also get the status Invoiced.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Financial effects for Closing POs

    Hello Maira.j,

    If you simply post an invoice for $0 or a small penny amount then you will get the items financially updated in your inventory. This might result in a large fluctuation of the cost price and inventory valuation if you usually pay a price for them.

    If the PO is just created but items have never been received then can't you simply delete those orders?

    Best regards,

    Ludwig

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