RE: A/P Accrual and Closed PO
Hi John
I seem to be coming across this similar issue with a number of my clients at the moment. It generally has stemmed from the purchasing process not being maintained correctly (not criticising, just seems to be the case most often).
This issue led me to write this blog about the overall processes for maintaining purchase orders that you may find helpful once you solve the issue:
www.olympic.co.nz/purchase-order-maintenance
Overall, the balance in the accruals should match the results on the Goods Received Not Invoiced report (details of how to run in the blog).
If it was me doing it, I would start with the current GRNI report. Validate what is on there and clear everything that shouldn't be (see the blog). Get a balance that you are happy with. I would then set up a separate GL account for non-GRNI accruals - these accounts could be combined for reporting purposes. Journal the balance difference between the GRNI report and your accruals account to this new account. That means you immediately have a starting point to ensure that you can balance from now on.
If you have a list of the purchase orders that you believe make up the rest of the balance, I would bring them back from history - just investigate what has happened. Try to find out what actually happened to the final invoice - has it been processed in AP directly to the expense account? If that is the case, you would journal the value from accruals back to the expense account because it would have hit there twice.
If you want to be accurate with it, then you investigate document by document. For some companies $900K would be massive - for others, a drop in the bucket. You may find that depending on the materiality, that just clearing the balance may be fine.
Hope that helps get you on the right path. And once clean, definitely easier to keep it clean!
Good Luck
Heather
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