Accounts Payable

This is the function used to process Vendor Invoices. Typically you will issue a PO, receive the merchandise and subsequently be issued an invoice from your supplier. Some simple journal entries are illustrated below. In addition there are two types of variances that can be tracked at the time of processing a vendor invoice:

Purchase Price Variance (PPV):  The difference between the Vendor Invoice Amount and the Purchase Order Cost on your PO

Standard Cost Variance:  The difference between the PO Cost and the Standard Cost of the Item from the Item Master

Note: Purchase Price Variance is not the same thing as Standard Cost Variance.  Standard Cost Variance gets calculated when you either alter the purchase cost at the time you create a PO OR you have Static Standard costs and the Vendor cost fluctuates.  The Purchase Price Variance however, tracks changes to the PO cost that you have in Seradex and the Cost of the item that is listed on the Vendor Invoice.  It is possible to have both.

Each of the variances can be tracked and placed against separate GL accounts.

For Accounts Payable you have several posting options available to you depending on how you Setup your accounting preferences.  Below illustrates the different postings.  For this example we are using an item that you purchased for $100 with GST and PST Applied

A) AP Accrual batches used, no PPV Variance, Actual Cost posting.

Accounts Payable Batch Entry

B) AP Accrual batches disabled, no PPV Variance, Actual Cost posting.

C)  AP Accrual batches enabled, $10.00 PPV Variance (item was really $110.00 on invoice), Actual Cost posting.

D)  AP Accrual batches disabled, $10.00 PPV Variance (item was really $110.00 on invoice), Actual Cost posting.

E)  AP Accrual batches enabled, $10.00 PPV Variance (item was really $110.00 on invoice), Actual Cost posting disabled.  Standard cost of item was $90.00, The purchase Price was $100.00.

Notes:

AP credit notes follow the same Gl Distribution as above; however, the debits and credits are reversed.

Clearing accounts can be used for accruals when using supported accounting packages other than Quickbooks.  When using Quickbooks an Accrual account must be used.