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Dynamics 365 Community / Forums / Microsoft Dynamics NAV (Archived) / Non-Inventory Item Pur...
Microsoft Dynamics NAV (Archived)

Non-Inventory Item Purchases in Purchase orders

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Posted on by themanjosh 85

Hello,

This question has been asked in a few different ways already but I couldn't really find the exact answer I was looking for so I will try to outline it in my way.

We are a food manufacturing company, and order a lot of items that are consumed in the making of our food. These items are all listed in the "ITEMS" List and when they are received they are added to inventory and the appropriate GL accounts. 


The purchaser also needs to Order things like gloves, pencils etc that are non inventory. At the moment when he makes a PO, he is entering these purchase as a GL Type, then need to enter the description etc every time he orders. And when the order is closed the appropriate account is expensed. It is an issue because he orders a lot of these items, and spends a lot of time entering information he has already entered 100 time. We are a small business and don't need to consume these items over time, just right when we buy them 

Is there a way that we can create an item, or some other kind of thing that will allow the purchaser to enter a number and have the description populate with the cost being sent to the right gl account, but have no inventory received? We are not interested in knowing how many, for example gloves, we have (so no receiving of inventory), only the expense of purchasing them and that the expense goes to the correct GL account. 

I'd prefer to have these types of items in a separate list from the stock items, I've been looking at non-stock or service item options but I don't see how to enter these into the Purchase order.

Any thoughts? Your assistance would be much appreciated

Thank you

*This post is locked for comments

  • RobertasR Profile Picture
    RobertasR 5,002 on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Then, Andrew, the only way in NAV to achieve it, without modifications to the system, is creating a report (simple Jet report would do) that gives you the total value of non-item goods received (both, invoiced and not-invoiced) for a month and manually posting journal to expenses balancing with accruals. Your invoices should post to accruals account to offset the journal posting, when the invoice is received.

    Robertas

  • Community Member Profile Picture
    Community Member on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Ah sorry  - my response was somewhat confusing. I was just trying to illustrate that there are situations where raw materials end up in COGS before the invoice is ever posted to the Purchase Order.

    The issue we are having currently is that we don't get invoices sometimes until months after the good/service is physically received. For example we will take in supplies and use all of them, but don't get the invoice until much later. We want to be able to recognize the expense for non-inventory items before we get the invoice (and create an interem liability).

  • RobertasR Profile Picture
    RobertasR 5,002 on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Andrew, if items are used for manufacturing, then it should go to expense account when the finished item is sold in terms of 'cost of goods sold' (COGS). The COGS will be made out of components, so if you put these components to expense twice (when purchasing and then with COGS), it doesn't look right.

    If invoices are not received in time and the component is used in production, the cost of finished item is made out of components' expected cost (which is the cost on the PO of component). Or, alternatively, you can go with standard costing - both ways it should work out fine.

    Of course, I can tell you only that much without knowing the full picture, but I believe you could find the way of working with standard NAV

    Robertas

  • Community Member Profile Picture
    Community Member on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Hi Robertas,

    Thanks for the quick response! I work for a food manufacturing company that has a very fast inventory conversion cycle, so often we receive, consume and sell raw materials before the invoice is entered into the system, so in a roundabout way we are already recognizing expense before an invoice is in hand. Really we are trying to address issues of not getting invoices in a  timely manner, so the idea that we can receive on a non-inventory PO to essentially automatically accrue the expense is rather enticing.

    Thanks again,

    Andrew

  • RobertasR Profile Picture
    RobertasR 5,002 on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Hi Andrew

    this is not possible with Standard Purchase Codes, and don't think would be correct or even legal. How can you put things into expense without the invoice? With items system creates the accrual entry in terms of GRNI, but that is balance sheet account.

    If you still want to go with expense after goods are received, the only way to go forward is to have a report on all non-item purchase lines that are received but not invoiced, and manually post the journal to expense and balancing with accrual. Then make sure your actual invoice posts into accrual account. But again, I don't think that is legal and audit might not like it.

    Robertas

  • Community Member Profile Picture
    Community Member on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Robertas - I am having the same issue as you described here.

    Is there a way you can have the posted receipt go straight to GL as expense? Need these expenses to flow to GL before the invoice is posted to the PO, but rather when the purchase is received. When I receive raw materials on an item level there is a GL entry made, but for this Standard Purchase Code, the receipt does not have any GL posting associated.

    Thanks,

    Andrew

  • themanjosh Profile Picture
    themanjosh 85 on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Hi Robertas,

    Thanks for your reply, I like the purchase code solution because as you said it doesn't create and directs it to the right account. It bugs me that there is not a different item type in NAV that does what I want directly without having to load up lines then delete the ones we don't need. Seems like a very common occurrence that people would want to buy, say pens in this way. Thank you very much for your help, this is the way I am going to do this now

  • themanjosh Profile Picture
    themanjosh 85 on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Hello,

    Thank you all for you replies. As far as I can tell, the non-stock items is not the solution. It looks like they only work for sales orders, not purchase orders.

    Regards

  • Verified answer
    RobertasR Profile Picture
    RobertasR 5,002 on at
    RE: Non-Inventory Item Purchases in Purchase orders

    Hi,

    I think there are 2 ways of doing this. Firstly, the 'Copy Document' functionality so you can copy any previous posted invoice as the new Purchase Order.

    Secondly, you can start using Standard Purchase Codes. For example, you can create a standard purchase codes 'GLOVES' and assign G/L Code and Description to go with it. Then you assign this Code to the Vendor (form the Vendor page use 'Std. Vend. Purchase Codes). Then on the Purchase Order when using this specific Vendor, click 'Get Std. Vend. Purchase Codes' and select GLOVES. This will insert a new line with the GL Code and description defined for GLOVES.

    You can assign more than one GL Code for the Purchase Code, for example, STATIONARY can include GL and description for pencils, GL and description for paper, etc. On the purchase order you can delete lines that you don't use. The best thing is that you are not creating items nor inventory and all purchases go straight to GL as expenses, as you are used doing now.

    Hope that helps,

    Robertas

  • Maneesha Profile Picture
    Maneesha 5,889 on at
    RE: Non-Inventory Item Purchases in Purchase orders

    hi

    i think non stock item will match for u

    refer msdn.microsoft.com/.../hh167976(v=nav.90).aspx

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