Period end Expensed PO encumbrance cycle, matching to invoice with full journal entries
1st case : you will not create an invoice in the same month, let us assume that now we are in Apr-13
“We will pay for supplier at 1st of May not in April”
Purchase order No 9 with GL date 1-Apr-2013 created, approved and reserved
-From purchasing navigate to> Accounting > SLA : main user menu > Accounting events
-Insert from transaction Date: 1-Apr-2013
-Insert to transaction Date: 1-Apr-2013
-Primary ledger: Egypt_Encum_led
-Then press on go
Po reserved journal will created , press on view journal entry button
DR charge Account “this account where included in Budget”
CR reserve Account
-Now we are going to receive this po in Organization “We are at the end of April”
-we will close “April-13” from payable period “Mandatory”
-we will run “Receipt Accruals - Period-End” from purchasing or from inventory responsibility
-Then run create Accounting in Apr-13 from cost management or Cost Management – SLA responsibility
-Navigate to “Cost Management – SLA” > inquiry > Accounting events
-Insert From – To transaction Date 1-Apr-2013 to 30-Apr-2013
-Primary ledger: Egypt_Encum_led then press on go
-Select the event , then press on view journal entries , 4 events will appeared as follows
-Let us open, each event, separately and explain journal entries
1st event “Journal entry status “Draft” and Balance Type “Actual”, and GL date
“30-Apr-2013” press on this event
The entry will be
-Charge Account in PO will be DR which means that the organization received a service
-Expense AP Accrual “which is intermediate Account “
2nd event “Journal entry status “Draft” and Balance Type “Encumbrance” and GL date
“30-Apr-2013”, press on this event
This entry to close PO Encumbrance that created from PO approval and reservation, the entry will be
-Charge Account will be credit because the PO is already received
- Reserve Encumbrance Account will be debit
Through the 1st and 2nd events , you can run final Accounting and Data can transferred to GL and
financial statement will be Accurate and it proves that there is a service received in Apr-13
3rd and 4th events are incomplete, they will not transferred to GL in Apr-13 because they related to
May-13 so what is the importance of them, 3rd and 4th event include reversing entries for what
happened in Receiving in Apr-13 and this to avoid duplication when creating supplier invoice and match
in May-13, let us see that, after create Accounting in May-13, the status will changed for both events
from incomplete to Draft or final
3rd event “Journal entry status “Incomplete” and Balance Type “Actual” and GL date
“01-May-2013”, press on this event
-Expensed AP accrual will be Debit “which is intermediate Account”
-Charge Account will be credit
4th event “Journal entry status “Incomplete” and Balance Type “Encumbrance” and GL date
“01-May-2013”, press on this event
DR charge Account “this account where included in Budget”
CR reserve Account
So by 3rd and 4th journal entry , the effect of receiving of expensed PO and close encumbrance is
cancelled in MAY-13 “ it will be effective after running create Accounting in May-13”
Now we are going to create supplier invoice and match to PO 9
Then validate and create Accounting in “Draft Mode”, then from tolls > View Accounting
There will be 2 events created
-Select first one then press on view journal entries
-Line number 1 and 3 related to invoice fund reservation
-Line number 2 and 4 related to closing PO fund reservation entry
-Navigate to second event
Press on view journal entries
We will see 2 events inside this event
Press on first event which is the normal entry of invoice
The debit line is “PO charge Account” which is extracted from PO during matching process
The credit side is the normal liability Account
Let us select second event which is the closing of invoice encumbrance reserve fund check and this entry
because of the invoice is actually invoiced
The journal entry will be
Reserve Account will be Debit
Charge Account will be credit
2nd Case: We will pay for customer at the same month, we will create PO with GL date Apr-13 and will
create an invoice in the same month “Apr-13”
Purchase order No 11 with GL date 1-Apr-2013 created, approved and reserved
-From purchasing navigate to> Accounting > SLA : main user menu > Accounting events
-Insert from transaction Date: 1-Apr-2013
-Insert to transaction Date: 1-Apr-2013
-Primary ledger: Egypt_Encum_led
-Then press on go and select your event and press on view journal entries
-We will navigate to payable to create Invoice for supplier at the same month “Apr-13”
Then validate and create Accounting in “Draft Mode”, then from tolls > View Accounting
There will be 2 events created
-Select first one then press on view journal entries
-Line number 1 and 4 related to invoice fund reservation
-Line number 2 and 3 related to closing PO fund reservation entry
-Navigate to the second event
We will see 2 events inside this event
Press on first event which is the normal entry of invoice
The debit line is “PO charge Account” which is extracted from PO during matching process
The credit side is the normal liability Account
Let us select second event which is the closing of invoice encumbrance reserve fund check and this entry
because of the invoice is actually invoiced in Apr-13
The journal entry will be
Reserve Account will be Debit
Charge Account will be credit
By create an invoice to supplier in APR-13 the encumbrance is closed and no journal entries will be
generated event if, this expensed PO is received in Organization, running “Receipt Accruals - Period-End”
an create Accounting,
