Does anybody have any input on a workflow for creating purchase orders with “estimated” costs?
Example - vendor estimates cost for services will be $1,500, PO written for $1,500. Cost may come in higher or lower.
*this is assuming no Subcontracts/Projects.
Here are some of my thoughts…
"PO with estimated costs" - option 1
- create normal PO at $1,500 (no accounting transaction)
- create PO receipt for $2,000 (also created AP bill)
- PO closed
- Accounting on receipt:
- debit COGS $2,000
- credit Inv. Purchase Accrual $2,000
- Accounting on AP Bill:
- debit Inv. Purchase Accrual $2,000
- credit Accts. Payable $2,000
In option 1 - PO can still go through approval, receipt approval = n/a, AP Bill approval if needed (won't be able to create approval where AP cost > PO cost)
"PO with estimated costs" - option 2
- create normal PO at $1,500 (no accounting transaction)
- PO approval if needed
- Place back on Hold - adjust cost
- *will have to run through approval again
