Create non-stock procurement category for purchasing fixed assets through purchase order

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Posted on by Pratik Bhosle

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Hello All,

I would like to purchase fixed assets through purchase order using procurement category.I will have threshold set up for the fixed assets for e.g anything <500 will be considered as expenses and >500 will be assets.

I will already have posting rule assigned against the procurement category (Stock management > Setup > Posting > Posting). Since i will have posting rule assigned against the category and the same category will be used to purchase the product whether >500 or <500.

How can I ensure the system will pick up the correct posting rule i.e <500 Dr.Exp / Cr. AP Control and >500 Dr.Assets / Cr.AP Control.

Your response will be highly appreciated,

Thanks,

Pratik

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

HI Pratik.

As mentioned on the above screenshot you have mention Capitalization Threshold as 500 means now system will accept minimum 500 or above it , if you mentioned Less then 500 then system will not accept.

Let me know your feedback.
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Ludwig Reinhard Microsoft Employee on at

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hi Patrik,

The posting profiles allow the differentiation only if you make use of different categories. Otherwise, the same account will be used.

I could imagine that depending on the $-amount a different category is selected to get the different posting created.

In the standard application I can't see an option how this can be achieved.

Best regards,

Ludwig
Pratik Bhosle 414 on at

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hello Ludwig,

It is essential for the business to have different postings on the receipt. You may receive the goods on time and post GRN however posting of invoice can be delayed due to late arrival, and hence the different posting is required to identify and differentiate between the expense and assets.

Do you think this can be achieved without having customisation ?

Await your response.

Thanks,

Pratik
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Ludwig Reinhard Microsoft Employee on at

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hi Pratik Bhosle,

Now I got the main issue :-)

This cannot be achieved at the time of the packing slip posting because the differentiation between an expense and a fixed asset is made at the time the invoice is posted.

There is no rule that can be setup in a way to say if you are an expense use account x with the posting type purchase expenditure uninvoiced and if you are a fixed asset use account y with the same posting type.

This requires an adjustment.

I am wondering whether this is really necessary because if there is no long time-gap between the time you post a packing slip and the time you post an invoice it does not matter what account is used for the purchase expenditure uninvoiced posting as it gets reversed quickly anyway. What is your view on this?

Best regards,

Ludwig
Pratik Bhosle 414 on at

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hi Ludwig,

Yes I making use of the parameter, hence the Product receipt voucher. The requirement requires the need for posting the accruals at point of receipt.

The issue is that it is posting to the same account when it is an Expense or an Asset, as it picks up the value from the posting setup (Purchase expenditure un-invoiced), but I require it to post to a P&L account if it is an expense, and a balance sheet account if it’s an Asset.

Thanks
Ludwig Reinhard Microsoft Employee on at

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hello Pratik Bhosle,

In general no product receipt voucher will be posted when you make use of procurement categories.

There is a parameter setting available in the policies form that allows to do that. Do you make use of that?

If not, there is no product receipt voucher.

Best regards,

Ludwig
Pratik Bhosle 414 on at

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hi Ludwig thanks for your detailed response however my query is not with the invoicing transactions postings, but general ledger postings at the point of product receipt. Please see my below scenarios and postings :-

Scenario 1: (This works fine)

Procurement Category (Computers) Unit Price: 100$

(this will be treated as an EXPENSE)

Product Receipt Posting

Debit: Expense Account (P&L)

Credit: Purchase Accrual (BS)

Invoice Posting

Credit: Expense Account (P&L) (Reversal)

Debit: Purchase Accrual (BS) (Reversal)

Debit Expense Account (P&L)

Credit: Supplier Control Account (BS)

Scenario 2: (Product Receipt Posting doesn’t meet my requirements)

Procurement Category (Computers) Unit Price: 600$ (this will be treated as an ASSET)

Product Receipt Posting –

Debit: Asset Account (BS) (This is posting to the P&L account setup under Purchase expenditure un-invoiced and I'm not able to setup to post to a specific balance sheet account)

Credit: Purchase Accrual (BS)

Invoice Posting

Credit: Asset Account (BS) (Reversal)

Debit: Purchase Accrual (BS) (Reversal)

Debit FA Acquisition Account (BS)

Credit: Supplier Control Account (BS)

Your response will be highly appreciated.

Thanks,
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Ludwig Reinhard Microsoft Employee on at

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hello Patrik,

I made an example to illustrate how this Feature works

1. I created a business rule for fixed assets (computers) and specified that all computers with a value <500$ need to be expensed

2. I created a first purchase requisition line with the procurement category for computers. Because the value is >500$ => a fixed asset group is assigned.

3. I created a second purchase Requisition line with the procurement category computer but with a value of 100$ => no fixed asset group is assigned.

4. Then I submitted my requisition to the workflow, got it approved and created a purchase order out of it.

The first line was automatically linked to a fixed asset group, the second one not.

5. Posting the packing slip did not create a voucher.

6. The invoice voucher looked as follows

Please do not get confused by the first two voucher lines and the two acquisition transactions, which are caused by the multiple value models that I have assigned.

The important thing is that the laptop with the 800$ is recorded as a fixed asset and the one with the 100$ is expensed.

I believe this feature fits your requirement and it would be great if you could possible test it in a demo environment.

Best regards,

Ludwig

Pratik Bhosle

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hi Ludwig, Following is the example that i would like entries to be posted accordingly. I would like have GRN to be posted into Balancesheet account than expense account.

Product Category is Computer		Expenses		Assets
		Unit Price 400=<500		Unit Price 700=>500
GRN Posting	Dr	Expense A/c.	P&L	Assets A/c.	BL	Purchase expenditure un-invoiced
	Cr	Purchase Accrued	BL	Purchase Accrued	BL

Invoice Posting		Reversal of GRN entry		Reversal of GRN entry
	Dr	Actual exp	P&L	Assets Acquisition	BL
	Cr	AP control acc	BL	AP Control Acc	BL

Ludwig Reinhard Microsoft Employee on at

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RE: Create non-stock procurement category for purchasing fixed assets through purchase order

Hello Patrik,

You want to have a BS account posted when recording packing slip for the asset that has a value >$500?

Can you possibly provide a simplified example because I did not really get your last point.

Many thanks and best regards,

Ludwig