This is an issue that we have had at my organization for a very long time. There doesn’t appear to be a way to correct this. Here is our problem:
Purchase Rep creates a PO after receiving quotes, or retrieving prices online.
PO is sent to CFO for approval
Purchaser places order, sends PO up to Accounting.
Inventory Clerk receives PO when products arrive at whatever pricing the PO initially had
Paperwork goes to Accounting Department
Here is where we get the problem. Somewhere along the way, the pricing has changed from what was initially ordered. Part prices change often, so it could happen while the PO is moving along for approval. Maybe the Purchase Rep found out about the pricing, but just forgot to change the PO. But it causes problems in Accounting.
The invoice comes in the mail, so the Accounting Clerk puts all paper work together and prepares an AP batch.
The invoice DOES NOT match the PO, because pricing has changed.
So herein lies the problem. We cannot change the pricing (that we know of) after a purchase order has been received in Epicor. So I have to manually change the price in Invoice Entry, which makes a variance in the system, because while what I have entered matches the bill, it does not match the PO.
Has anyone else had this problem? What is the best way to correct this? Is there a way to change the price of a line item on a Purchase Order that has been received? This causes quite a headache for us in Accounting and we just do not know how to handle this.
I may have not explained that the best, so please feel free to ask any questions you may have. Thanks in advance for all of your knowledge and time! I would really like to finally have this thorn out of my side!
This is a situation of “Planned vs. Actual”. The PO was the Planned price and the Actual is what you actually paid (+/-) which is why you create the Purchase Price Variance (PPV). The PPV would be an expense account which could be placed
with the remainder of the cost of goods accounts or as an overhead account depending on the Accountant wants it. The PPV did not go into the cost of inventory or manufacturing because the received item went in at the PO cost.
I would put the PPV account in with the COGS and leave it there. If you are seeing large PPV’s investigate it and correct the process.
So you are saying we should create a separate GL account for the variance, and enter the difference as a “misc. charge” coded to that account? What if the price of the invoice is less than what the PO had?
Also, is it possible to “un-receive” a PO, reopen the PO, change the pricing, re-receive, and then complete AP in Invoice Entry at the correct pricing? If yes, is this incredibly inconvenient? I have wondered if you could do this, but have found literally 0 topics on E10 Help referencing such a method.
We are open minded to whatever ideas you may have. I would like to have a few different methods to try out to determine what works best for all involved, and for the company.
Safe Harbor : I’m not in accounting so don’t take what I say as gospel. I just try my best to create accurate job costing and that means I have to deal with accounting a little bit. So this is what I know.
Yes you can do this. We have done this before. It was usually to fix very large discrepancies, like when the PO had $0 for the amount because the price wasn’t known, so the receipts were done at $0 and obviously needed to be fixed. You would have to make sure that this is done right after receipt though. If there are transactions done with the parts after receipt, the web gets more tangled.
Depends on who you talk to For some people an extra check box is incredibly inconvenient, for others they don’t really care.
It probably all comes down to how picky your accounting is and if they are ok with use PPV like @CTCharlie mentioned. For small variances, and if you say prices are that volatile, it would make sense to get used to that function. Otherwise you are crippling the rest of your organization a bit. I want to say I think there is a tolerance for prices that don’t match exactly that you can set up?? But I’m not sure on that.
To add to what Brandon said, yes you can “unreceive” it IF the Inspection Required checkbox is not checked. If it is and it has been passed through Inspection Processing, you cannot unreceive it. Also, if you have invoiced for it, you cannot unreceive it. Those are the things that lock receiving down.
My Purchaser/Inventory rep says that if a PO has been “All Received” it cannot be un-received? Can you tell me the simple steps involved in un-receiving a PO?
Also,l is the “Inspection Required” checkbox selected in the PO Entry or Receipt entry?
To unreceive a pack slip, go to the Line tab and uncheck the Received checkbox, then save. It puts the items from that line in an “Arrived” state. Open the PO, unapprove it and change the price, then reapprove it. Once that is done, you can recheck the received checkbox.
As for the Inspection Required checkbox, that is done in the PO on the line tab but it also shows up on the pack slip line, though you cannot change it from there. Note, that if Inspection Processing hasn’t processed the items yet, you can unreceive them which takes them off the Inspection Processing workbench. You can then do as instructed above.
What @Beth said. And I think your lock out must have to do with something else (like invoiced?) because simply being all received doesn’t stop you from un-receiving items.
I am the only person in Accounting and do all of the AP. Can you still unreceive a line of a PO if part of the order has been all received and invoiced?
As far as unreceiving a line in Receipt Entry, there are only two things that stop you from doing this:
1. Inspection Required is checked and Inspection Processing has processed the PO Receipt
2. The receipt line has been invoiced
With option 2, if the receipt line is in an AP batch but the batch hasn’t been posted, you can delete it from the batch and then “unreceive” it. If left in the batch, it’s locked until it is removed. Once you post it though, the game is over.
As far as partials, if you have received part of the PO line in a previous pack slip and it has been invoiced, then no, you can’t change the PO line for all of the quantity. But, you could reduce the quantity on that line to what has been received and paid for previously, then create a new line with the correct quantity and price for the remaining amount. You would then be able to receive against that line. Of course this is a lot more work.
Ok, so I just walked through some things with my Purchaser, Inventory Clerk, and Production Manager. A couple issues that we have run into when going to unreceive a line:
If the date of receipt is in a different month than you are currently in (i.e. received in December, it is now January 8th), Epicor will prevent you from unreceiving the line
If the Inventory Clerk has already “kitted” a part (issued out to jobs), then you cannot unreceive because the quantity on the receipt does not match what is now in the system’s inventory
It is starting to feel as though there isn’t a whole lot that you can override in the system. It seems as though the best bet to unreceive a line, is to do so basically as soon as Inventory receives it. The issue is that I’m not seeing any difference in price until I receive the invoice, which could be up to a week or more after receipt.
Is there any other methods out there for this scenario, other than trying to unreceive and the PPV? By the way I really appreciate everyone’s responses!
A few things to keep in mind when doing the “Un-receive, fix po, and re-receive” …
The “un-receipt” will create PUR-xxx part trans with the date of the original recipt as the tran date, but with today’s date as the system. The qty and amounts will have the opposite sign of a regular PUR-xxxx. The re-receipt will do the same.
If you use the average cost method, the un-receipt may not set the the cost back to what it was prior to the initial receipt, if material was issued in the time between.
If using Earliest Allowed Apply dates, you might not be able to un-receive and re-receive with the same date as the original receipt. @kpierson ran into this.
If you don’t use Earliest Apply Date, you can create part trans for a closed period. Then when COS/WIP rollup is run, those trans will be forced to be posted in the current period.
If Parts shipped between the original receipt and the re-receipt, their COS may be incorrect.
i think best bet would be to take the PPV and then add the Cost of Good Sold as a seperate line. It’s much easier to this way than Un-receiving every PO because of the timing issue. i know we ran into problems where our receiving guys backed out a receipt from a prior period that was closed. Then when we ran the Capture, we had to include that prior period to make sure that was included. Also, it messes with ending inventory (receiving in last period, close books, then un-receive from prior period after capture is run).
Depending on your costing method, PPV could be from:
Standard Cost to PO cost variance
PO cost to Invoice cost variance.
The net of these 2 added to Cost of sales would give you the actual cost.
We have our income statement setup as:
Revenue
-COGS
= Gross Profit
+/- PPV variance
+/- Mfg variance from jobs
In response to your question above, since I have access to the Earliest Apply Date (which in the GL area), I change it to an earlier date to do my unreceiving and then change it back when I’m done. If you don’t have access to it, then you probably need to work with the variance as others were saying.
For some people an extra check box is incredibly inconvenient, for others they don’t really care.
