You can reconcile an account by manually reviewing the Accrued Purchase Receipts account in QuickBooks and making sure that you have a receipt for every invoice and vice versa and that the amounts match.
Consider the following to help in your Accrued Purchase Receipts (also known as Purchase Suspense) reconciliation. Start with these concepts to understand issues you may be having in current procedures that are causing accounts to be off balance:
For more information about Accrued Purchase Receipts, see our related articles on how Accrued Purchase Receipts works and how to locate overstated Accrued Purchase Receipts through reporting in Acctivate.
Overall Accrued Purchase Receipts discrepancies can be caused by the following incorrect transactions:
- ISSUE: Inventory Receipt amount does not match Purchase Invoice amount for the items that are inventoried. Note: This issue is corrected in Acctivate 7.0, but will only correct receipts from that point forward.
EXAMPLE: If you receive 3 items at $10.00, but later through your purchase invoice approve them for $12.00 it does not update inventory and will leave a $2 discrepancy in the Accrued Purchase Receipts account per item totaling $6.
RESOLUTION: These transactions should be corrected by performing an adjusting receipt prior to entering the purchase invoice in the Inventory Receipt screen. In the case of the example you would have a two line receipt with the first line as a negative quantity of three at $10.00 and a second line as a positive quantity of three at $12.00. This will reverse the original receipt from inventory, post an updated value and properly post the correct value that will be processed through the Purchase Invoice function.
- ISSUE: Inventory Receipts that establish values in inventory are being made that are not related to a Purchase Order.
RESOLUTION: This is OK only if there is a method in place to remove the amount received out of Accrued Purchase Receipts. Some companies do not use PO’s or they may not do a Purchase Invoice because a journal entry for wire transfers is entered in QuickBooks. Without the purchase invoice function it is important to choose the Accrued Purchase Receipts account in the invoice or journal entry for the value of the items that will be offset in the receipt.
How to reconcile an Accrued Purchase Receipts account
You can reconcile an account by manually reviewing the Accrued Purchase Receipts account in QuickBooks and making sure that you have a receipt for every invoice and vise versa and that the amounts match.
- Review the Register or QuickReport of the Accrued Purchase Receipts account in QuickBooks. You will find that the Acctivate Inventory Receipt journals are positive and you will find the Purchase Invoice bills are listed as negative. If you work through the register they should cancel each other out.
- You will find that the Acctivate Inventory Receipt journals may be listed in summary and will need to investigate further into Acctivate for the details.
- From the Inventory Reports menu select Transaction – Inventory Detail Journal. Use the Journal Number that is listed in QuickBooks to find the matching journal details.
- When reviewing this journal it may have several inventory receipts listed. To obtain clarity on the Inventory Receipts there will be Session Number column on this report that will define each specific receipt. Use the Inventory Receipts report found in the same section to expose the details of that session include each PO number.
- You should be able to cancel out all inventory receipts with a purchase invoice. What will not cancel out will establish your total balance.
If manually reconciling the account is too overwhelming due to the number of transactions, then it might be best to determine what the current balance should be and get it to that with a journal entry. Typically this journal entry is made between the Accrued Purchase Receipts and the Cost of Goods Sold account because the items are already sold out of inventory at the incorrect cost.
- Make sure that everything has synced prior to doing any type of journal entry.
- The current balance should be items received but have not yet entered the vendor invoice.
- If you choose this method it is important to understand what caused it to be out of balance to correct those steps for the future.
Can an account be reconciled as of a month end date?
This is actually sometimes difficult because the vendor bills will post based on the invoice date to the Accrued Purchase Receipts account. You may receive inventory on the second of the month but the vendor bill may be posted with a date in the month prior.
It is best to always balance the Accrued Purchase Receipts with an ‘as of now’ approach. It is important that you first synchronize all inventory and vendor transactions before attempting to balance.
Best practices – balancing your accounts on a daily / weekly basis
- As you post each receipt into inventory print the Receipt Register report and put it into a folder.
- As you enter each Purchase Invoice pull the Receipt Register report out of the folder and make sure the value matches your invoice for the total inventory purchase minus extra charges such as shipping. (*If the value does not match then do an adjusting receipt where you remove the inventory at the wrong value and post it again at the correct value.)
- Remove the Receipt Register from the pile after the purchase invoice has been posted and synchronized to the accounting program.
- Add all remaining Receipt Registers and the total should equal your Accrued Purchase Receipts ending account balance.