Ordering Expensed Inventory

Post date: Mar 05, 2018 7:1:58 PM

We've made a change in the PO logic.  Previously, you could order 'accrued' INVENTORY by entering the item number - or you could order 'NON-INVENTORY' (office supplies, small tools, etc.) by clicking the 'NON-INVENTORY' button on the 'Edit PO Line' screen.  But you couldn't order 'expensed' inventory.  'Expensed' inventory includes items which have real inventory numbers, and can be shipped/billed on orders, but which aren't 'accrued' in the accounting system, and so the on-hand quantities and costs are not stored in the inventory.  These items won't appear 'on hand', or be recorded in persistent  cost buckets, because they are expensed as soon as the vendor's invoice is paid.  See this note for a detailed explanation of how inventory is defined and processed.

We've recently added the ability to order those 'Expensed' items through the PO system.  You may still choose not to do so, but here's why we did it:

If you SELL expensed items on your invoices, but don't PURCHASE them using their correct item number, you'll have no audit trail, back from the invoice to the inventory, to see where the item was purchased, what it last cost, etc.  In other words, there's NO WAY to look at an expensed item that was sold and research the PO on which it was purchased.  By using the actual item number on your PO, you'll now be able to do so, AND you'll be able to backtrack - with a full audit trail - for tax auditors, etc.

NOTE: Until now, the GL expense account drop down list didn't appear when you were ordering inventory, because it was automatically set to go to the correct Payables Clearing account.  But now, because you can order 'expensed' inventory as well, that expense account drop down will ALWAYS be visible, since it's needed when you order EXPENSED inventory, as well as when you order NON-INVENTORY.  A footnote at the bottom of the entry screen references this.

But if the item being ordered is an 'accrued' inventory item, the program basically ignores the drop down list and ALWAYS saves it with the appropriate Payables Clearing account.  (This account is set in the 'Edit Locations (1017)' function for each inventory location.)