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Outsourced POs

Posted on by 5,080

Hi there,

When generating a PO from and Outsourced item...the  purchase and variance accounts are not getting populated?

Can some one tell me where this is setup?

Tami

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  • Don Pugh Profile Picture
    Don Pugh 45 on at
    RE: Outsourced POs

    Frank,

    I read with interest your analysis of the variance account used when matching an invoice.

    I am getting some strange results.

    We use Machine for Outsourced services.

    Create the MO, create the PO.  All is fine. 

    Receive the shipment for the PO, and it debits to the account specified in WIP-Machine, as expected.

    When we match the invoice to the PO, and there is a variance (The invoice is higher than the original PO and shipment receipt), the amount of the variance defaults to a PURCH type, and uses the the account specified in WIP-Machine.   This is really a Purchase Price variance, but nothing we can do will use a different account.  Because the MO was closed weeks ago, this amount can not be booked to the cost of making inventory, but needs to go to PPV.  Any ideas on what is causing this?

    Thanks.  Don

  • Verified answer
    Frank Hamelly | MVP, MCP, CSA Profile Picture
    Frank Hamelly | MVP... 4,029 Super User 2024 Season 2 on at
    RE: Outsourced POs

    When using Outsourced PO's Tami, the Purchase Account is the WIP account (in your case the Labour Variable Overhead account) and the Variance account is the Labour Variable Overhead Variance account.  These should be defaulting in if they are set at the item level and all your other Outsourcing settings are set properly.  

    When you post a receiving transaction on an Outsourced PO, the WIP account is debited and Accrued Purchases is credited.  The variance account would come in to play when you match an invoice to the receipt, if there's a difference between the receipt price and the invoice price.

    So, if you are manually entering these accounts in the PO, then your Labour Variable Overhead account would be your Purchases account and the Labour Variable Overhead Variance account would be your variance account.

    Make sense?

  • Tami Farrelly Profile Picture
    Tami Farrelly 5,080 on at
    RE: Outsourced POs

    we are using Labour variable overhead for the sub contract POs....the PO is looking for Purchase and variance accounts...

    Do I put the purchase accounts in there?

  • Verified answer
    Frank Hamelly | MVP, MCP, CSA Profile Picture
    Frank Hamelly | MVP... 4,029 Super User 2024 Season 2 on at
    RE: Outsourced POs

    First, you have to specify which Cost Bucket you want to use for Outsourced PO's (MFG>>Setup>>System Defaults>>WIP).  Then you set the accounts for that cost bucket in Manufacturing Account Setup in the Item Card for the WIP and Variance accounts.

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