Tuesday, February 18, 2014

Procure to Pay (P2P)–Accounting Entries


As you know "procure to pay" Business Flow start Purchasing requisition till paying to vendors and most important, in all the case the purchase is made for basic element called Items.
As you know there are three types of items:
  • Inventory Expense Item
  • Inventory Asset Item
  • Expense item
Above three Items are creating the account like below changes :
I   EXPENSES ITEM CASE:-    
      Debit Credit
  1 PO Creating    
    No Entry - -
  2 Create Receipt    
    Inventory Receiving A/C XXX  
    Accrual A/C   XXX
  3 Inspection    
    No Entry - -
  4 Receiving Transaction    
    Expenses A/C XXX  
    Inventory Receiving A/C   XXX
  5 Payable Invoice when Matched to PO    
    Accrual A/C XXX  
    Liability A/c   XXX
  6 Vendor Payment    
    Liability A/c XXX  
    Bank Clearing A/c   XXX
  7 When dearer In bank    
    Bank Clearing A/c XXX  
    Bank A/c   XXX
         
II   INVENTORY ITEM CASE:-    
         
  1 PO Creating    
    No Entry - -
  2 Create Receipt    
    Inventory Receiving A/C XXX  
    Accrual A/C   XXX
  3 Inspection    
    No Entry - -
  4 Delivery of Item    
    Inventory Validation A/c XXX  
    Inventory Receiving A/C   XXX
  5 Payable Invoice when matching to PO    
    Accrual A/C XXX  
    Liability A/c   XXX
  6 Payment Made to Vendor    
    Liability A/c XXX  
    Bank Clearing A/c   XXX
  7 When Clearing In Bank    
    Bank Clearing A/c XXX  
    Bank A/c   XXX
  8 Inventory Issued to Department    
    Expenses A/c XXX  
    Inventory Validation A/c   XXX
         
III   ASSEST ITEM CASE:-    
         
  1 PO Creating    
    No Entry - -
  2 Create Receipt    
    Inventory Receiving A/C XXX  
    Accrual A/C   XXX
  3 Inspection    
    No Entry - -
  4 Receiving Transaction    
    Assets Clearing A/c XXX  
    Inventory Receiving A/C   XXX
  5 Payable Invoice when matching to PO    
    Accrual A/C XXX  
    Liability A/c   XXX
  6 Payment Made to Vendor    
    Liability A/c XXX  
    Bank Clearing A/c   XXX
  7 When Clearing In Bank    
    Bank Clearing A/c XXX  
    Bank A/c   XXX
  8 When Assets addition done and capitalized in FA Module    
    Assets A/c XXX  
    Assets Clearing A/c   XXX


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