Sage 100: How To Complete or Resolve A Backordered Purchase Order
How to complete or resolve a backordered purchase order in Sage 100, how to clear items from the Purchase Clearing Report, or how to resolve purchase orders where the Received or Invoiced quantities do not equal the Ordered quantity.
There are a variety of reasons for Purchase Orders to remain in Purchase Order Entry with a Backorder status. Some include:
- The Post Accounts Payable Invoices check box setting in Purchase Order Options may be selected. However, instead of enter Purchase Order, Receipt of Invoice Entry to update and create Accounts Payable invoices, users may be entering invoices in Accounts Payable, Invoice Data Entry instead.
- Users may have physically received items in the warehouse, but neglected to post them via Purchase Order, Receipt of Goods Entry – or entered an incorrect quantity, or forgotten to receive some of the line items.
- Users may have entered the invoice via Purchase Order, Receipt of Invoice Entry, but entered an incorrect quantity, or forgotten to invoice some of the line items.
- A quantity was Ordered, but the Received and Invoiced quantities were lower (vendor did not send the full amount ordered). The vendor may send more at a later time, or the vendor may not plan to send more (short order).
To fix this issue for future purchase orders:
- Click Purchase Order, Main, Purchase Order Options.
- Select the Post Accounts Payable Invoices check box.
- If Post Accounts Payable Invoices is cleared, the system only looks at ordered and received quantities to determine purchase order status is complete.
- If Post Accounts Payable Invoices is selected, the system compares ordered quantity, received quantity and invoiced quantity to determine purchase order status is complete.
To fix existing purchase orders not showing complete status:
- Click Purchase Order, Period End, Purchase Clearing Reports
- Select the Purchases Clearing Report, All Types
- Click Print or Preview
- Review the report and note the lines where ordered quantity, received quantity, and invoiced quantity do not match.
- The Daily Receipt Registers/Update process compares the lines for all purchase orders. When ordered quantity equals received quantity, and received quantity equals invoiced quantity, the purchase order will complete.
Below are some sample scenarios:
Ordered = 10
Received = 8
Invoiced = 8
- If the remaining two items are received, process a receipt of goods with invoice number for a quantity of 2.
- If the remaining two items are not received, change the ordered quantity to 8 in Purchase Order Entry. Once all quantities match, and the order is accepted in PO entry, the order is completed.
Ordered = 10
Received = 10
Invoiced = 0
In this example, the invoice was entered directly in Accounts Payable. A GL entry that debits Inventory and credits Purchases Clearing was made when the receipt of goods was updated, so there is a credit amount in the Purchases Clearing Account.
- Have all users exit the Purchase Order module until you are done.
- Click Purchase Order, Setup, and Purchase Order Options.
- Clear the Post Accounts Payable Invoices. The invoiced quantity will now be ignored.
- Click Purchase Order Entry
- Change the ordered quantity on each line to match the received quantity, or If the ordered quantity=received quantity, make a change to the purchase order by adding a /C comment line to the purchase order
- The order is completed.
*** Before entering or updating further receipts, Click Purchase Order, Setup, Purchase Order Options. Reselect the Post Accounts Payable Invoices check box.
Note: To balance the purchases clearing account, debit the purchases clearing account, and credit the A/P expense account that the A/P invoice debited.
- Leave Post Accounts Payable Invoices selected in Purchase order Options.
- Click Purchase Order, Main, Receipt of Invoice
- Process Receipt of invoice for 10 items. Use the same A/P invoice number with -A appended that was used in Accounts Payable Invoice Data Entry previously.
- In A/P, adjust the newly created invoice back out against the A/P expense account that the original invoice debited.
- This debits Inventory and credits A/P.
Ordered = 10
Received = 12
Invoiced = 12
- If the order was over received, process a return of goods with invoice number for a quantity of 2. Use the same A/P invoice number with -A appended.
- If the quantity of 12 is accurate, change the ordered quantity to 12. Accept the order. The order is completed.
A completed PO remains in Purchase Order Entry until the Number of Days to Retain Completed Purchase orders, defined in Purchase Order, Setup, Purchase Order Options is exceeded, and Period end processing or Purge Completed POs is performed.
The Automatically Close Partially Received POs setting allows a percentage variance between the quantity ordered and received or invoiced. If the variance is set at 10%, 10 items were ordered, and 9 items received and invoiced, the PO will complete.
The Purge Obsolete POs option in Period End Processing uses the Order Date from the Header tab of Purchase Order Entry, as well as the Last PO and Last Invoice date on the Totals tab. All dates must be older than the specified purge date. A blank date is OK. This function purges all open or completed purchase orders, but not backordered purchase orders. Make a G/L journal entry to adjust the Purchases Clearing account for those POs where the received quantity does not match the invoiced quantity.