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Tridea Partners - A Columbus Company

Purchase Order Product Receipt and Vendor Invoice Posting in Microsoft Dynamics AX 2012 R3


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    In Microsoft Dynamics AX 2012, when a purchase order is product receipt and vendor invoice updated for stocked items, there are two accounting processes and resulting entries which occur:

    The accrued liability is updated (new feature in AX 2012)

    The inventory cost is updated (available in AX 2009)

     

    To enable these accounting processes, two new posting types are available and a main account must be specified for each:

    Purchase expenditure, un-invoiced: This posting type is used to accrue the liability and product receipt amounts when a purchase order is product receipt updated.

    Purchase expenditure for product: This posting type is used to offset the liability and inventory amounts when a purchase order invoice is updated.

     

    The accounts for these posting types can be specified in the Posting form (Inventory and Warehouse management> Setup>Posting>Posting) and on the Purchase order tab on the Item groups form (Inventory management>Inventory>Item groups).

     

    AX 2012 R3

     

    In AX 2012 R3, both accounting processes referenced above will create subledger journal and voucher entries. For posting type Purchase expenditure, un-invoiced, accounting entries which net to 0 will not be transferred to the general journal as in AX 2012 R2. The Purchase expenditure, un-invoiced postings are not displayed in the Voucher transactions form but in the Subledger journal form. The Subledger journal form will display all generated subledger accounting entries, including those not transferred to the general ledger.

     

    Product Receipt Voucher transactions and Subledger journal:

    Product Receipt Voucher transactions and Subledger journal

    For posting type Purchase expenditure for product, accounting entries that net to 0 will no longer display both a line for the credit and debit entries in the Voucher transactions form as in AX 2012 R2 but will be displayed in the Subledger journal and transferred to the general ledger in a single zero-amount accounting entry.

     

    Vendor Invoice Voucher transactions and Subledger journal:

    Vendor Invoice Voucher transactions and Subledger journal:

     

    Instances exist for both posting types Purchase expenditure for product and Purchase expenditure, un-invoiced where there will be a balance for stocked items such as from currency translation or a stocked item which is returned with a variance between the unit price and average cost.

     

    This blog post references the Microsoft Dynamics AX 2012 R3 White Paper ‘Accounting for stocked items on product receipts and vendor invoices’

     

    by Robin Ellsworth, AX Application Consultant at Tridea Partners. Tridea is a Microsoft Dynamics AX partner serving Southern California.

    4 Responses to “Purchase Order Product Receipt and Vendor Invoice Posting in Microsoft Dynamics AX 2012 R3”

    1. nice article and very helpful, please keep posting.

    2. Jacks says:

      Robin, good article, thanks
      When I buy a service item -say consulting service and account for “receipt”, I would expect this to be accrued to “Consulting expenses” at the time of receipt and not when I record the vendor invoice. Is this possible?

      I see that Purchase Expenditure Un-invoiced account can be set to equal the GL account for actual expenditure-but this will result in clumsy posting in and out of this account. Ideally, we get the debit in the first place to actual expenditure account at the time of receipt and not at the time of invoice.
      Thanks

    3. Hi Stacy,
      It can be accomplished by selecting the ‘Accrue liability on product receipt’ checkbox on the Item model group associated with the service item.
      Item model group form [Inventory management>Setup>Inventory>Item model groups]
      You must also have an account specified for the following posting types in the Item groups form for the Item group associated with the service item.
      Purchase, accrual
      Purchase expenditure, un-invoiced
      Purchase expenditure for expense

      Item groups form [Inventory management>Setup>Inventory>Item groups]
      After this setup is complete, when posting a purchase order product receipt the following voucher transactions will be recorded:
      DR Account with posting type Purchase expenditure, un-invoiced
      CR Account with posting type Purchase, accrual

      When posting the purchase order invoice, the entries recorded for the purchase order product receipt will be reversed.
      DR Account with posting type Purchase, accrual
      CR Account with posting type Purchase expenditure, un-invoiced
      And the following transactions will occur to record the liability to the vendor and record the expense.
      DR Account with posting type Purchase expenditure for expense
      CR Vendor/AP

    4. Good evening,

      How do I go about when receipting at a date (with a certain currency rate) and then invoicing on a date much later than the receipt date (at a different currency rate). I do not want to impact the cost of the inventory as I want to account for this at the receipt date but also don’t want to override the exchange rate upon invoicing.

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