PO Correction Workaround

Hi,

I would first create a material transaction with a negative quantity depending on the stage of the production order. This transaction would put back into inventory the goods.

Then, I would create an inventory adjustment without quantity and put the difference between the amount that should have been put into inventory and the amount that had as the extended cost. That being, the inventory value will be adjusted. The reason code used for the adjustment must be tied to the same account as where you allocate the difference between PO receipt and AP Bill value*.

Finally, I would create the material transactions as usual.

*Depending on the option for the PPV variance selected at the Purchase Order Preferences screen, the difference can be either allocated into the inventory account and it will then create the same inventory adjustment without quantity as what I propose. If this is the case, you do not have to do the inventory adjustment because the system will do it once you enter the AP Bill. The other option for purchase price variance allocation, is a PPV account. Then, you have to do the inventory adjustment manually and the reason code used needs to be the same PPV account as the one the AP Bill is using.

Hi ​@Godawela ,

Recommended approaches are below-

through the AP Bill

1. Check first

• Has an AP bill been created for this receipt? If one was released at the wrong price, reverse it with the Reverse action on the Bills and Adjustments screen. Then confirm the receipt shows as unbilled again.
• Check that the period of the receipt and of the issues is still open in GL and IN.
• Note each item’s valuation method (Average, FIFO or Standard) and whether the production orders are still open.
• Do all of this in a test copy of the company first.

2. Create the bill from the PO receipt, in USD at the correct value

• The bill has to be in USD because it is linked to a USD PO.
• Set the bill’s currency rate to the receipt’s rate (300 in the example).
• Change the unit cost to the USD equivalent: LKR 1,000 ÷ 300 = USD 3.3333. Override the extended amount if you need to control rounding.
• Release the bill.

Alternative: correct it manually

Use this only if the bill route isn’t possible, for example because the vendor was already paid.

1. On the Adjustments screen, post zero-quantity cost adjustments for the on-hand portion. For FIFO items, link them to the original receipt number. Offset them to a correction clearing account.
2. Post a GL journal for the consumed portion: Cr WIP or COGS, Dr clearing.
3. Clear the leftover PO Accrual against the clearing account with a GL journal. Close the PO lines so the receipt stops appearing as unbilled.

This works, but it means more manual entries for each item, and the “unbilled receipts” reports won’t match. That’s why the bill approach is preferred.

Hope above helps!!