An important AccountEdge feature is the ability to receive items into inventory, making them available for sale, before you actually record the vendor's bill for the items.
To be able to use the receive items feature you need to set a linked account for Item Receipts. To do this:
- Go to Setup > Linked Accounts > Purchases Accounts.
- Check the box next to "I can receive items without a Vendor bill"
- Click the dropdown to choose your Liability Account for Item Receipts - the default for this is A/P Accrual Inventory
How Do You Receive an Item?
To use this feature you'll need to order the items on a purchase Order. After that you receive the items on the Order by selecting "Receive Items" from the action menu.
What Happens When You Receive an Item?
When you receive items on an Order, but haven't yet received the bill, AccountEdge will post the value of the items to the A/P Accrual - Inventory account (credit), and increase the value of the inventory asset account (debit). (The value cannot yet be posted to the Accounts Payable account because you haven't actually received the bill.)
What Happens When You Receive Your Vendor Bill?
After you receive the bill from your Vendor you will need to convert the received order into a Bill in AccountEdge. To do this you go back to the original order and choose to "Create Bill" from the action menu. You then need to record the bill.
When you record the bill the following will happen:
- The original receive item will be reversed which displays as a negative purchase.
- AccountEdge will transfer the bill amount from the A/P Accural - Inventory account to the Accounts Payable account, where it will remain until paid.
- The items will be received into inventory with a value equivalent to what was on the bill
If you look back at the Purchases Register after creating a bill from an order that was received against you will see the original order (positive) a reversal of this order (negative) and then the bill you received. This is exactly what you should see as the original order and reversal cancel each other out.
Troubleshooting Issues Involving Your A/P Accrual Inventory Account
Since any inventory value is transferred to the Accounts Payable account when a Received Items Order is converted to a Bill, and this should be done as soon as possible, there should be no value in the A/P Accrual - Inventory account for any length of time. If there is a lingering value in the A/P Accrual - Inventory account, check for open Received Items Orders by opening the Purchases Register, and clicking on the Orders tab. After indicating an appropriate date range, check the right-hand column to see if items have been received on Orders. Alternatively you can run the Received Item report by going to Reports > Index to Reports > Purchases. Look under the bold heading "Purchase Register" for the "Open Item Receipts" report.
You may need to convert these Orders to Bills. If there are no Received Items Orders, you'll need to use the Find Transactions feature to determine how the value was posted to the account.