Overview

When vendor bills arrive that involve material pricing costs that are higher than the negotiated costs, there are two methods of processing these discrepancies.

Option 1: Verify the vendor invoice for the costs that were negotiated and not for the costs displayed on the vendor invoice. This is usually done with the vendor’s agreement to allow the invoice to be “short paid”. Once the credit invoice from the vendor arrives (if they even send one), simply place this credit into your files for reference. This type of process does not require the credit invoice to be entered into Accounts Payable.

Option 2: In cases where the vendor invoice must be verified at the higher costs until the vendor issues a credit for the pricing, it will be necessary to enter the credit invoice into Accounts Payable. Follow these procedures to enter the vendor’s credit invoice and re-verify the materials at the accurate costs.

Locate the Purchase Order number that corresponds to the inventory record(s) involved in the vendor’s credit invoice. You can locate the Purchase Order number from the Status Tab at the Sale/Order or simply locate it in Purchase Orders. Once the Purchase Order number has been located navigate to Accounts Payable to begin the entry process.

Click on the New button located on the top action toolbar to create a new payable for the vendor’s credit invoice. Select the appropriate vendor from the Vendor pull-down list. Toggle the payable voucher to “Credit” with the radio button located above the “unaccepted” label (see Figure 1.1).

Figure 1.1

Enter the Posting Date, the Vendor Invoice Date, the Credit #, and the total amount of the credit in the Credit Amount field. Click on the PO Materials tab just as you would for a regular verification of materials. Only this time, you’ll need to locate the PO# using the Inventory Locator area to the far right of the PO Materials Tab. Enter the PO# involved in the vendor’s credit invoice into the PO# field in the Inventory Locator area and click the Locate button (see Figure 1.2).

Figure 1.2

Enter the cost that the materials should have been based on the credit invoice information. For example, if the original cost was verified at $4.19 per unit and the credit amount is $42.25 that means the cost per unit should have been $3.50 per unit. You will click on the Paper on the verification screen (see Figure 1.3) enter the amount in the Mat Tot box (see Figure 1.4) then set Unit. You can continue with the credit invoice if there is a correction to be made to the amount of freight, tax, etc. When the Credit Amount and the Total Verified Credit amount are equal (minus any Pre-Paid Tax figures like HST, GST, etc.) click the Proceed button and then return to the face of the payable voucher.

Figure 1.4

Then Click the Accept button on the top action toolbar to accept the payable and re-verify the materials at the corrected cost. You will be able to see the change in actual cost on any profits tabs of any job associated with the materials and the inventory costs will be adjusted to the corrected cost.