Solved

Purchased from Costco and pay to Visa company scenario

  • 29 December 2021
  • 9 replies
  • 311 views

Userlevel 6
Badge +5

Hello,

         We are having a scenario and I would like to know what is the best way to log them in system. Here is the scenario and what we are doing now:

 

        Both “Costco” and “CITI bank” are vendors in our system.

        We purchase some items from “Costco” using credit card. And in order to track inventory, we created a PO from Costco and received the items and generated the bill to Costco. We call bill 1 .

        And also monthly, we get a bill from “CITI bank” including the total amount used in Costco and other amounts(means not the same with bill 1), like fuel, gas (not inventory item, so no POs). In order to log the payment, we also create a bill to “CITI Bank”. We call bill 2.

 

         Now you see, on bill 1 and bill 2 we are actually having same item. so we don’t have to pay twice. And also we don’t have to double our liabilities.

       Can anyone give me some directions to deal with this scenario in a best way.

icon

Best answer by amajors 29 December 2021, 14:21

View original

9 replies

Userlevel 6
Badge +5

I have 2 thoughts on my mind:

Option1, We do just as we do right now. We pay bill 2 with check. And we create a debit adjustment to offset the bill1.  This way is followed user’s habit.

Option2,  For goods purchased from Costco, we no longer created PO. We just do  IN receipt to receive the goods. In this way, there is only 1 bill to pay.

Can anyone give me some suggestions if either way is OK. And also is there a better way?

Userlevel 7
Badge +11

Hi @ray20 

This is a scenario where purchases / expenses paid using corporate credit card. Let me know if following helps :

Processing Expenses with a Corporate Credit Card :

https://help-2021r2.acumatica.com/(W(5))/Help?ScreenId=ShowWiki&pageid=ce6f5a46-ddee-4e68-bf6b-a3cf59c8d24f

https://help-2021r2.acumatica.com/(W(6))/Wiki/ShowWiki.aspx?pageid=d232358c-d2c4-4fbd-9e62-4dcc37319ad8

Regards,

 

Userlevel 6
Badge +5

@vkumar  Great,Thank you, I am sure this would perfectly solve our scenario. But is it a new feature coming in 2021R2? Unfortunately, since this is the end of year, we are not planning to upgrade our version in the next 1 month or two. Also we are having some “Bill 1”s need to be closed. 

Can I ask some more questions?
1, The help document says on releasing of the AP bill, it should credit AP and debit an expense account.
While I checked our system, it is credit AP, Debit “PO Accrual” account (Which is a liability account ). Is this correct?
2, If I would like to offset the bill1 by a manually created debit adjustment. What expense account is suggested to be used on that adjustment line level?
 

 

Userlevel 5
Badge +2

ray20 - if you have 2021 R2 you can follow the steps and accomplish what you are trying to do. We have this exact setup for your scenario and it works like a charm.

Create a Cash Account for your Credit Card (dedicated GL Account) and mark it used for AP and to be Reconciled. (we have created a cash account for each card that is on the account to help track monthly limits for individuals)

Enter your PO’s to Costco and Other Vendors as normal. Create bill from PO (We use the PrePay function to post the CC payment when it happens. Just be sure that the actual charge is what the PrePay will be or you’ll have to do some voiding/debit adjustments) .

Pay the bill with the Credit Card Cash Account(s). When the statement comes, reconcile. Enter any other PO’s or Quick Checks needed and balance.

Once it is reconciled and posted, your GL account will have the balance to be paid. This GL account should be the default for your CC Vendor and be used on the CC bill (we have a generic recurring bill that stays balanced until statement arrives).

Enter the CC bill to be paid from a different cash account (Check, EFT...). The detail line should point to the CC GL Account(s).

Pay the bill and all should be balanced. - We pay the whole CC each month. It stays cleaner this way for us.

Userlevel 6
Badge +5

Can I ask some more questions?
1, The help document says on releasing of the AP bill, it should credit AP and debit an expense account.
While I checked our system, it is credit AP, Debit “PO Accrual” account (Which is a liability account ). Is this correct?
2, If I would like to offset the bill1 by a manually created debit adjustment. What expense account is suggested to be used on that adjustment line level?
 

 

@vkumar @amajors 
Hello Guys, you both give me the perfect way to go. Thank you.
However, I still have some old documents to fix. Because we previously  not did this in a better way.
Can you check my answer on my questions:
1, For receipt related bill, on releasing of the bill, Debit “Purchase accrual” is correct.
2, I should put the expense account used in bill2 to offset the expense balance increasing. Because the expense would Actually increase in COGS when the bill1 related receipt items been sold. So the bill2 caused expense increase should be offset.

Userlevel 5
Badge +2

@ray20 

  1. Releasing Bill 1 debits Purchase Accrual (Expense Accounts are posted with on Receipt or Bill 1) and credits Accounts Payable
  2. Paying Bill 1 with the credit card account will debit the Accounts Payable and credit your CC account. Bill 2 will Debit the CC Account and Debit your Real Cash account.

 

Userlevel 6
Badge +5

@amajors 
Thank you for helping on this.  I understand you are talking about the new “Corporate Credit Card” Method. What you mentioned is absolutely right.
But what I am asking for is for our previously old documents Cleaning. How to deal with them.
Unfortunately, Our previously bill 2 was already paid by real cash account and debit our expense account.
And bill 1 remained balanced.  I have to adjust all bill 1s.
And I think I have got the correct answer. Like below:

Release Old bill 1
 Credit  AP,         Debit  Purchase Accrual
Release Debit Adj
Credit Cost of good sold,     Debit AP

combining the two, actually doing
Credit COGS ,   Debit  Purchase Accrual

Which makes both the Balance of COGS and Purchase Accrual decreased.

 

Here, decreasing balance of COGS is reasonable, because when the received item is sold, the balance of COGS would be increased, so it should not be increased twice.

((Time 1 is the item sold, Time 2 is releasing the credit card bill(in our previous way, which debit COGS directly))

Userlevel 5
Badge +2

@ray20 I’m not comfortable telling you what adjustments you need to make because I don’t have it in front of me and I don’t want to have any miscommunications causing you more issues. If you go to the financial tab of the Bill/Check than you can click on the Batch and see the Journal Transaction. You can reclassify what accounts were affected for the transaction and this will keep the corrections in the journal instead of having to create debits and credits in the Bills/Checks. Just make sure that once they are entered, you go to the Journal Transaction list and release them.

Userlevel 6
Badge +5

@amajors Hello, Just back from new year leave.
Thank you for your advice. You are right. To reclassify the transactions is a good way to go.
But for my situation, I am not only have to reclassify the GL, but also I have a lot of Old Bill 1s to close. 
After I clean the old documents, I wish we can use the corporate card method to deal the scenario in the future.
Thank you for all your help . Wish you a happy and safe new Year.

Reply


About Acumatica ERP system
Acumatica Cloud ERP provides the best business management solution for transforming your company to thrive in the new digital economy. Built on a future-proof platform with open architecture for rapid integrations, scalability, and ease of use, Acumatica delivers unparalleled value to small and midmarket organizations. Connected Business. Delivered.
© 2008 — 2024  Acumatica, Inc. All rights reserved