Purchase order accounting entries
I've spent a good chunk of my day trying to unravel a messy purchase order situation and wanted to make sure I'm not going mad.
The way I see it the whole purchase order thing should work a little like this:-
- PO is raised for goods and services - No impact on accounting records
- Goods and received and in good order etc etc - DR to P&L expense, CR to accruals in the balance sheet
- Invoice comes in from supplier - DR the accrual above, CR Supplier/Purchase ledger
I guess my question is two fold......
1. am i right in saying no entry should hit the accounting records until the goods are received (the accrual stage above)
2. shouldnt a fully integrated system such as SAP, Oracle etc etc create that accrual for you (and subsequently get rid of it when the supplier invoice is matched)
The records im looking at just now show maual accruals for goods received where no invoice has been received and I'm begining to panic a little.
Can someone at least tell me that my theory is sound?
I need a drink................
Thanks in advance!
- Taxfiler - SA100 - More efficient? 512 5
- See you all on the other side 645 6
- 12Pay 367 2
- dividends 498 2
- R&D 279 1
- Quarterly Reporting - The Logistics 1,135 17
- Auto enrolment contribution rates 420 3
- How long are you waiting for appeal reply 359 4
- Borrowing money to loan to company 328 1
- Mother as Guarantor for Son's mortgage 516 5
- Seeking a tax case 592 9
- When do we qualify for state pension? 455 4
- Companies house strike off 448 3
- Tax treatment of alterations to property 368 2
- Moving to the cloud 713 9
- Iris open space/doc exchange for SATRs 205 2
- How much to charge for payroll? 864 16
- Unincorporated charity transfer to CIO 193 4
- BTC vs Digita 1,072 29
- Has anyone tried calling HMRC to get tax on dividends put in code? 464 4
- HMRC Joint Filing 544
- Capital Contribution towards a company car 411
- Capital Reduction & Impact on EIS Shares 361
- IRIS and FRS 102 343
- Capitalising Finance Lease 309
- USA help 306
- National Minimum Wage issue on Directors joining a Workplace Pension 281
- Dormant company accounts under FRS 102 277
- Capital gains on rental property 253
- Sage Coretime 228