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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Ludwig Reinhard Microsoft Employee on at

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Hello Patrik,

In the Procurement and Sourcing module there are business rules for fixed asset determination available that you can use for this purpose. Please have a look at this feature as it seems to fit what you describe above.

Best regards,

Ludwig

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Pratik Bhosle 414 on at

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Hi Ludwig thanks for the quick response. If the procurement category > fixed assets > computer use the same posting rule from stock management >posting how this rule will help to determine which posting rule should be used for > & <.

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Ludwig Reinhard Microsoft Employee on at

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Hi Pratik Bhosle,

The business rules for fixed asset feature makes use of purchase requisitions and at the time the requisition is made, a comparison of the costs with the defined thresholds is made to determine whether a fixed asset needs to be created or not. Once the requisition is transferred to a PO the decision whether to expense or capitalize the costs is already made.

Best regards,

Ludwig

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Pratik Bhosle 414 on at

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Hi Ludwig thanks for the reply, that works fine for scenario 1 when you have >500, however scenario 2 is when you receipt the good for GRN entries should be posted into balancesheet account i.e Dr. Asset A/c. and Cr. Purchase Accrual and will get reversed when invoice is posted, but it still gets posted onto purchase expenditure-uninvoiced (P&L) account, can i get this posted into Balance Sheet. Please let me have your view. Thanks Pratik

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Ludwig Reinhard Microsoft Employee on at

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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

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Pratik Bhosle

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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

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Ludwig Reinhard Microsoft Employee on at

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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

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Pratik Bhosle 414 on at

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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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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

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Pratik Bhosle 414 on at

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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

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