Hi,
The PO accrual process happens through a batch job.
Below are some details
*******************************************************
Open Purchase Order Accrual Functional Specification
This document details the functionality of the Open Purchase Order system within Dynamics. The system operates on a ‘batch’ basis, so that General Ledger updates are only made to postings when a batch job is created and processed to run this functionality. The journals created by this functionality are fixed journals and do not auto-reverse in the following period; accrual reversal takes place when changes are made to a Purchase Order (e.g. when an invoice is posted against the Purchase Order line).
1. Exclusions
Purchase Orders meeting any of the following conditions are excluded and do not accrue:
• Work Stream financial dimensions for Projects (PR, PJ-PJM-D, PJ-PJM-V, PJ-PRC-D, PM).
• Line ‘item number’ of “SubcontractorMAINT” (this ‘item number’ is used only for annual service/maintenance sub-contractors, which are accrued separately).
2. PO Status
Purchase Orders will only be accrued when the Purchase Order has been fully approved and confirmed (i.e. the Approved status is “Confirmed”).
Only certain Purchase Order line statuses will accrue:
Status Accrual Action
Open Accrues
Received Accrues
Invoiced Does not accrue
Cancelled Does not accrue
When a Purchase Order status is updated to be ‘Invoiced’ or ‘Cancelled’ the accrual will reverse on the date the change takes effect.
If a Purchase Order is amended and is in ‘Draft’, ‘In review’ or ‘Approved’ status, the accrual will not change until the Purchase Order is confirmed again.
3. Date Behaviours
Purchase Orders are accrued based on the ‘required date’ on the Purchase Order line, according to these rules:
‘Required Date’ In Behaviour
Current financial period Accrue on required date
Prior financial period Accrue on first open date of current financial period
Future financial period Do not accrue until the required date is reached
If an alteration is made to the ‘required date’ this effects changes to the accrual on the following basis:
Changed ‘Required Date’ In Behaviour
Prior date in current financial period Old accrual reversed, re-accrued on prior date
e.g. a PO dated for 20th of this month is changed to 10th of this month, today’s date is 23rd will: reverse the old accrual in the GL on 20th and post a new accrual dated 10th.
Future date in current financial period Old accrual reversed, does not re-accrue until the required date is reached
e.g. a PO dated for 20th of this month is changed to 28th of this month, today’s date is 23rd will: reverse the old accrual in the GL on 20th and will not post a new accrual until the 28th.
Prior financial period Old accrual reversed, re-accrued on first open date of current financial period
e.g. a PO dated 10th of prior month is changed to 25th of prior month will: reverse the old accrual in the GL on 1st of current month and post a new accrual on 1st of current month (being the first open date in the system).
Future financial period Old accrual reversed, does not re-accrue until the required date is reached
e.g. a PO dated for 10th of this month is changed to 15th of next month, today’s date is 23rd will: reverse the old accrual in the GL on 10th of this month and not post a new accrual until 15th of next month.
e.g. a PO dated for 15th of next month is changed to 20th of next month will: not post any transactions until 20th of next month.
4. General Ledger Transactions
The accruals post to the General Ledger according to these rules:
Work Stream Debit Credit
EW, FM-EXW-D 7221000 [1] 8211055 [1]
Projects Not accrued Not accrued
All other Cost of Sales Relevant posting profile for PO ‘line number’ type [2] 8211035
Overheads Relevant posting profile for PO ‘line number’ type [2] 8211020
Notes:
[1] Postings to change accruals as a result of altered WIP statuses (to ‘Invoiced’ or ‘Comprehens’) are covered by the EWAC batch functionality.
[2] Report to be developed to make posting profiles visible to users.
5. Supplier Invoices
When supplier invoices are posted against a Purchase Order line, the accrual is reversed with the same date as the invoice is posted (or the first day of the current open financial period if the batch is run after the period is closed). The accrual reversal operates through the batch process, however the invoice posting transactions (including to the General Ledger) post immediately the invoice is posted out of the invoice pool. The postings for the accrual reversal and invoice postings work as follows:
Debit Credit
EW, FM-EXW-D Accrual reversal 8211055 7221000
Invoice posting 7211000 [1] 8111000
Projects Accrual reversal Not accrued Not accrued
Invoice posting Relevant posting profile for PO ‘line number’ type 8111000
All other Cost of Sales Accrual reversal 8211035 Relevant posting profile for PO ‘line number’ type
Invoice posting Relevant posting profile for PO ‘line number’ type 8111000
Overheads Accrual reversal 8211020 Relevant posting profile for PO ‘line number’ type
Invoice posting Relevant posting profile for PO ‘line number’ type 8111000
Notes:
[1] Postings to move costs out of WIP to the P&L as a result of altered WIP statuses (to ‘Invoiced’ or ‘Comprehens’) are covered by the ‘Paid WIP’ batch functionality.
6. Part-Invoiced POs
Where a Purchase Order line has been part-invoiced e.g. through receipt of a partial quantity, the previous accrual is reversed, and a new accrual generated for the outstanding value.
7. Value Changes
Changes to Purchase Order values are dealt with as follows:
• If a Purchase Order line is amended with changed values, the old accrual will reverse and a new accrual will be generated for the amended value.
• Additional Purchase Order lines (i.e. further lines are added to an existing Purchase Order) are treated as a new accrual. The functionality accrues on a per line basis and treats each Purchase Order line as a different transaction.
• If the value of a line changes is changed immediately before it is matched with a supplier invoice, the original line value accrual is reversed.
8. Supplier Credit Notes
The accrual functionality works in exactly the same way for supplier credit notes, but the debits and credits are reversed.
9. Posting Profile Errors
If the posting profile is missing for a PO ‘line number’ type, the Purchase Order accrual will not post. The PO accrual journal is generated but remains as an unposted journal. When the posting profile is added, the journal will stay unposted. Should an amendment be made to the PO, any accrual reversal will then post.
10. Month End Close
The batch process should not be run after the month end AP/AR closure has been performed, until the ledger status is ‘On hold’ (fully closed). The batch process will still run and generate journals but these will not be posted when Dynamics is restricted to ‘MJP’ or ‘CJP’ and the journals will not be re-created the following month.
11. General Ledger Journal Descriptions
The journals can be identified in the General Ledger journals listing as journal type ‘POAccrual’ and the voucher number is prefixed ‘entityPA’ (e.g. ‘D05PA’).
When the batch process posts journals into the General Ledger, the description includes a status/reason for that posting. This can assist with tracking changes through the accruals system and General Ledger. The descriptions used are:
Description Meaning
POnumber Confirmed accrual Accrual created, either a new accrual or after an old accrual has been reversed
POnumber Amended accrual (reversal) Reversal of an accrual after it has been amended (e.g. for a change of value)
POnumber Reversed accrual (cancel) Reversal of an accrual after PO line has been cancelled
POnumber Reversed accrual (future date) Reversal of an accrual after PO line has been changed to a future date
POnumber Reversed accrual (Invoiced) Reversal of an accrual after a supplier invoice has been posted
