The Purchase Order to Accounts Payable functionality allows Accounting Seed users to create vendor Payables from the Purchase Order with a single click. Users will be able to create and post Payables directly from the Purchase Order object with ease. A Payable can be created for a full or partial Purchase Order. This functionality carries over all applicable information from the Purchase Order and Purchase Order Lines to the Payable and Payable Lines, respectively.
Do you want to:
Create a Payable from a Purchase Order
Note: Required fields display with a red asterisk (*).
- Navigate to Accounting Home and click the Create Entries tab. Then, under the Orders menu, click Purchase Orders.
- From the Purchase Order list view, select the Purchase Order(s) for which you want to generate a Payable.
- Click Create Payable.
- On the Create Payable intermediate screen, the Vendor Account and the Ledger fields will auto-populate. These fields carry over from the Purchase Order.
- The Issue Date and the Due Date display as blank. Click the Date hyperlink to populate the Issue Date.
Note: Once populated, you can manually change the Issue Date, if necessary.
Note: The Due Date is calculated based upon the Issue Date plus the Payable Days Due on the Account. If the Payable Days Due field on the Account is blank, the Due Date will automatically display the same as the Issue Date. However, you can manually adjust this date, as necessary.
- The Purchase Order Status defaults to Open. Click the drop-down list to select a different status, if necessary
- In the Quantity to Pay column, enter the value for which you want to create a Payable.
Note: By selecting a value of 'Yes,' all of the Quantity to Pay fields will auto-populate with the Unbilled Quantities. By selecting a value of 'No,' the Quantity to Pay fields can be manually populated with the desired quantities.
Note: Click here to view the above image in full screen.
Note: Any Purchase Order Lines will flow through on the Payable as Payable Lines. On the Payable Line a relationship exists to the Purchase Order Line. This allows for full traceability from the Payable Line to Purchase Order Line.
- Click Create Payable to proceed.
- A Payable Edit intermediate screen will display. Make any necessary edits and click Save to save and be directed to the Payable.
Note: These fields on the Payable will default as follows unless the user overrides them when creating a new Payable:
- Posting Status defaults to Approved.
- Payment Status defaults to Unpaid.
- Currency is carried over from the Purchase Order Currency.
- Payee Reference, an editable required field, references the PO used and date/time stamps when the Payable is created.
- Accounting Period defaults based on the Payable Date.
You will see a Related List of Payable Lines for each Purchase Order Line. This will allow you to see how much has been paid for each Purchase Order Line.
Additional enhancements of this feature are as follows:
- If GL Account Variables 1-4, Project, and Project Task are populated on the Purchase Order Line, these fields will be mapped to the Payable Line.
Accounting for Payables of an inventoried Product
Purchase Orders are typically associated with Inventoried Products. There are two (2) steps in processing these Purchase Orders:
- The Receive Purchase Order process that creates the Purchase Order Inventory Movement (see Receive/Unreceive a Purchase Order for more detail).
- The Payable that records the liability to the vendor for monies owed. It is important to note that when a Payable is created for an inventoried product, the debit portion of the GL transaction will always be to Vouchers Payable. The Vouchers Payable account serves as a temporary suspense account that is offset by the Purchase Order Receive process. Please note: It is a best practice that the Receive Purchase Order be completed prior to the creation of the Payable.
Important: The Quantity to pay must be equal to or less than the Quantity on the PO Line. If the Quantity was over-received, the Payable Line will need to be updated so that the Quantity and Unit Cost match the Quantity Received and Unit Cost of the PO Line. This will ensure that the Vouchers Payable is properly cleared.
The implications of this are that the Expense GL Account field on the Payable Line from a Payable created from a Purchase Order will always be to the Vouchers Payable GL Account (as defined in Accounting Settings). Any differences between the Standard Unit Cost and Purchase Order/Payable Unit Cost will be recorded to the Inventory Variance GL Account (defined in Accounting Settings). For a more detailed discussion of the accounting behind this process, please see Debit & Credit Entries Created When Posting.
Note: This is in Accounting Seed’s legacy Standard Unit Cost system only. As of the Hibiscus Fall 2019 release, all new Accounting Seed installations utilize the weighted-average cost inventory valuation method. For more detailed information on Accounting Seed’s new weighted-average cost system, see Inventory Valuation - Weighted-Average Cost. For any legacy customers on our Standard Unit Cost system that would like to migrate to Weighted-Average Cost, please contact Support.
Summer '23 Release
- On the Create Payable from the Purchase Order intermediate screen, the Issue Date will no longer default to today’s date and has been set to blank.