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Receive/Unreceive a Purchase Order

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Prerequisite

Please review the Create a Purchase Order article.

Overview

Receiving a purchase order is performed when a product arrives at a company warehouse so the Accounting Seed application has a record of the:

  • Product being purchased and added to company inventory. 
  • Storage location (warehouse name and location within the warehouse).
  • New weighted-average cost of the products. (The weighted-average cost calculation is automatically triggered when the Product is received and posted.

The purpose of unreceiving a purchase order is to correct details on the purchase order or the Purchase Order Inventory Movement (created when the Purchase Order was received), for example, incorrect price, date, quantity, or storage location. Unreceiving a Purchase Order will also trigger the weighted-average cost to be recalculated. 

There is no method for editing the details of a Purchase Order, if anything needs correcting, the product must be unreceived at which point incorrect information can be corrected and then it can be received again. 

Important: A user-defined posting status should not be created or assigned as a default status on any Inventory Movement objects. This will interfere with the posting of these records.

Do you want to:

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Receive a Purchase Order

  1. Navigate to Accounting Home and click the Create Entries tab. Then, under the Orders menu, click Purchase Orders.
  2. Select a list view (other than the Recently list view). 
  3. From the Purchase Order list view, select the Purchase order that you want to receive.
  4. Click Receive in the right upper corner (depending on the page layout, the buttons may be visible or in a drop-down list). For a full discussion on the accounting of Purchase Orders, please see Debit & Credit Entries Created When Posted.

    The Purchase Order screen displays the Purchase Order Receive details.

    PO_00a.png
    Note: Click here to view the above image in full screen. 

  5. Use the drop-down lists to identify and specify which Warehouse and Location will be designated to store the item.
  6. For Quantity All, selecting Yes selects all items on the Purchase Order to be received. 
    To specify a lesser number of items to be received, enter a number in the blank.

    Note: A Purchase Order can be over-received if the “Prevent Over Receive” validation rule on the Purchase Order Line object has been disabled for your org (organization). Once the validation rule has been disabled, the overage should be included on the initial Purchase Order Receive intermediate screen, as the PO Line, once it has been fully received, will no longer be available on the Receive screen.  The sample screen below shows 12 items being received instead of 10.

    Note: If the quantity is over-received, the Purchase Order Inventory Movement (PIM) will use the Unit Cost from the Purchase Order for the over-received quantity. If the quantity over-received’s Unit Cost is different, the PO Line will need to be adjusted.

    PO_01.png
    Note: Click here to view the above image in full screen. 

  7. The Receive Date defaults to today. Adjust the date, if necessary. Then  click Save & Refresh or Save & Complete.

    From the Purchase Order screen, review the Purchase Order Line related list to see the Quantity Received/Unreceived information.

    PO_02.png
    Note: Click here to view the above image in full screen. 

    Note: If the quantity was over-received, the Quantity Unreceived column on the Purchase Order Line will be a negative number.

Note: Receiving product (clicking the Receive button) triggers three (3) actions:

  1. Creates a Purchase Order Inventory Movement that records the quantity received. 

    Rec-unr-Purchase-Order-Inventory-Movement.png

  2. Creates accounting entries to the general ledger. This can be viewed on the Transaction Related list of the Purchase Order Inventory Movement.
    Debit Inventory
    Credit Vouchers payable

    Rec-Unrec-transactions.png
    Note: Click here to view the above image in full screen. 

Note: A user can scan bar codes for a serialized item by navigating to the Purchase Order Line received and clicking the scan button. Using a bar code scanner, record the serial numbers of each item received.

  1. Triggers the weighted-average cost calculation. The new weighted-average cost is posted to the Inventory Cost object.  (See Inventory Valuation - Weighted-Average Cost in the Knowledge Base for more details.)

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Unreceive a Purchase Order

Unreceiving a purchase order is performed by deleting the applicable Purchase Order Inventory Movement.

  1. Before proceeding to the next step, review the Delete Purchase Order Inventory Movements section below.
  2. Click the Purchase Order Line of the product to be unreceived.

    Rec-Unrec-Purchase-Order-Line.png

  3. Click the Related tab to display the Purchase Order Inventory Movement record.

    Rec-Unrec-a-PO-clicktheRelatedtoabtodisplayPOIM.png

  4. In the Related list, identify the item to unreceive and click Delete.
    1. When Inventory Movements are deleted they are now automatically emptied from the Recycle Bin as a safeguard, preventing users from undeleting them.

Rec-Unr-DELETE.png

  1. Upon deletion, three (3) actions are triggered:
    1. The Purchase Order Inventory Movements list is adjusted and the system provides a confirmation message.

      Rec-Unr-PO-deleted-message-quantity-0.png

    2. The transactions recorded to receive the product are removed/undone.
    3. The weighted-average cost calculation is triggered. The new weighted-average cost is posted to the Inventory Cost object. (See Inventory Valuation - Weighted-Average Cost in the Knowledge Base for more details.)       

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Delete Purchase Order Inventory Movements 

Best Practices: The following best practices should be followed when you are deleting Purchase Order Inventory Movements (PIMs):

  1. Never delete a PIM unless it is the LAST Inventory Movement processed on that Product. This includes any Inventory Movement (IM), i.e., Sales Order Inventory Movement (SIM), Purchase Order Inventory Movement (PIM), Inbound Inventory Movement (IIM), or Outbound Inventory Movement (OIM).  If the inventory was used in a SIM, those must be backed out prior to deleting the PIM.
  2. Absolutely do not delete the PIM if other inbound IMs have been processed for that Product after it. The PIM can ONLY be deleted if ALL inbounds IMs (and if necessary outbound IMs) that have been processed have been deleted.
  3. If the PIM is not the LAST IM, and backing out IMs processed after it is not feasible, the correction can only be accomplished using one of the following two ways:
      1. Manually determine/calculate the correct Average Cost, Quantity and GL Account balance for that Product. Outbound (OIM) all QTYs on All IQAs (Inventory Quantity Available) for that Product. Inbound (IIM) all quantities on all IQAs using the correct Average Cost that was calculated. If the Outbound and Inbound GL balance amounts are different, use a Journal Entry to balance them.
                                                             -OR-
      2. If the situation is relatively simple, for example, the Product only has 1 IQA or only 1 IQA has any Quantity on it, a single IIM and OIM may be feasible. First, manually determine/calculate the correct Average Cost, Quantity and GL Account balance for that product. Then, do either a OIM & IIM or a IIM & OIM to get the average cost to what you calculated as being correct. If the old total inventory GL balance does not equal the new, use a Journal Entry to balance.
          1. Outbound (OIM) 1 QTY for that Product. Calculate what the unit must be on 1 QTY of the Product for the Average Cost to be what you calculated to be correct. IIM QTY=1 at that Unit Cost. Use a Journal Entry to ensure that the Ledger balances to this change.
          2. Using the current QTY & Average Cost, calculate what the Unit Cost would have to be on 1 QTY of the Product for the Average Cost to be what you calculated to be correct. IIM QTY=1 at that Unit Cost. OIM Qty=1. Use a Journal Entry to ensure that the Ledger balances to this change.

 

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Magnolia-Release.png

Release Notes and Schedule

  • With the Magnolia - Home release a Purchase Order can be over-received if the “Prevent Over Receive” validation rule on the Purchase Order Line object has been disabled for your org (organization). Once the validation rule has been disabled, the overage must be included on the initial Purchase Order in the Purchase Order Receive intermediate screen.

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