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!
- Bookkeeping software for cafe and VAT 6 1
- VAT Reg.for sole trader with 2 S/E 19 1
- Sage Payroll 71 1
- SAGE 50 - Invoice Date 99 2
- VAT flat rate scheme 411 8
- Tolley UK sales number 198 7
- Starting new accounting business 190 3
- Is a property owner charging a peppercorn rent to a limited company acceptable 433 10
- Intermediaries reporting - who does it apply to? 100 2
- Does SMP and SPP go up if leave goes across 2 tax years? 338 14
- Are agent account managers any good? 122 2
- Is the annual Money Laundering Payment tax allowable 139 1
- Non Resident Landlord Scheme - Penalties 62 3
- VAT registration - which address? 56 1
- Leaving the flat rate scheme 82 2
- Practice Company Secretarial Software recommendations please 225 4
- On line Remote Training 239 7
- Clients 596 11
- Group Relief 80 1
- Sage 200 vatable journal? 103 4
- QROP pension input amounts 490
- HMRC BENCHMARK EXPENSES 469
- write off loan or loan to equity swap or both 436
- EPS and CIS deductions 291
- Sole trade business in UK, but the owner works from EU 282
- Construction CIS LLP Company 273
- Stamp duty on house transfer between spouses 236
- SAGE winforecast 196
- LIVE: Budget aftermath webinar 179
- Overdrawn director account 171