How to Use the Sage 100 Purchases Clearing Report

What is a Purchase clearing report?

What: A Purchases Clearing report lists all purchase order lines that meet both of the following criteria:

• A quantity has been received or invoiced
  
  
• The quantity received and the quantity invoiced do not match
  
  

Why: The purpose of this report is to uncover discrepancies in postings to the Purchases Clearing General Ledger account so they can be resolved in a timely manner.

A secondary benefit is so that the status of all purchase orders that have been completely received and invoiced can be automatically updated to Complete in Sage 100.

• When a purchase order receipt of goods is posted, the Purchases Clearing General Ledger account is credited.
  
  
• When a purchase order receipt of invoice is posted, the Purchases Clearing account is debited.
  
  Therefore, the net result to this account for each purchase order line should ultimately be zero.
  
  

(If the receipt of goods invoice cost differs from the receipt of invoice’s cost, the former entry’s cost amount is posted to the Purchases Clearing account so that it nets to 0, and the remainder is posted to the Purchases Variance account. Similarly, if the item’s valuation is Standard Cost, the Standard Cost amount will post to Purchases Clearing and the variance will post to the Purchase Variance account.)

When/How: Sage recommends you run and review the Purchases Clearing report before closing each fiscal period in Purchase Order so that discrepancies can be identified and resolved within the current period. It is your prerogative to review this report more frequently if you wish.

To run the report:

1. Open Purchase Order > Period End > Purchases Clearing Report.
   
   
2. Choose Last Unit Cost or Net Amount Received – Amount Invoiced.
   
   
3. Click Print or Preview.

Review the report to identify valid lines versus lines with discrepancies.

In the below example:

• The line-items highlighted in yellow may be issues and will require research and possible corrective action.
  
  
• The line-items highlighted in blue are likely valid, as the PO receipts are recent and you may be waiting for the invoice or the goods. If that is the case, no action is required.
  
  

Corrective actions for specific issues

Scenario 1 - The receipt of goods and/or invoice is correct

You are simply waiting for the vendor to send the invoice or the goods so you can complete your entries and close out the PO.

Resolution: no action is required.

Scenario 2 - Invoiced Quantity is Incorrect

Resolution: Enter and post a Purchase Order receipt of invoice.

1. Enter the line-item quantity required to make the TOTAL invoiced quantity correct.

                   Example: Invoiced quantity was -1 and should have been 99. Enter an invoice for quantity
                 100 for a net invoiced quantity of 99.

2. If necessary, adjust the unit costs so that the total invoiced amount (including the amount previously invoiced) is correct.
   
   NOTE: Adjusting unit costs will not affect your inventory items’ Average Costs, as they are calculated during receipt of goods only.
   
   
   

Scenario 3 - Invoice Was Entered in Accounts Payable

Resolution: Enter a Purchase Order receipt of invoice:

1. Enter the quantities of goods that the vendor invoiced.
2. Adjust the unit cost(s) to $0.

The postings will be:

• Debit to Purchases Clearing (to reverse the credit accrued during receipt of goods)
• Credit to the Purchases Variance account.

NOTE: Adjusting unit costs will not affect your inventory items’ Average Costs, as they are calculated during receipt of goods only.

Scenario 4 - Received Quantity is Incorrect

Resolution I: If the item’s stock quantity has not been adjusted through an inventory adjustment or physical count -

Enter a receipt of goods:

1. Enter the line-item quantity required to make the TOTAL received quantity correct.
   
   Example: quantity received was – 5 and should have been +5. Enter a receipt of goods for quantity +10, for a net quantity of +5.
   
   
2. Accept or change the item costs to match those on the receipt of invoice.
   
   

Resolution II: If the item’s stock quantity HAS since been adjusted through an inventory adjustment or physical count:

Enter a receipt of invoice:

1. Enter the line-item quantity required to make the TOTAL invoiced quantity match the TOTAL received quantity on the report (even if the received quantity is incorrect).
   
   Example:
   
   
   1. Quantity received on the report is 0, but 5 were actually received in the warehouse.
   2. Quantity invoiced was 5.
      
      Enter a PO receipt of invoice for -5 so that both quantity received and invoiced on the report are 0.
      
      
2. Change the item unit cost(s) to $0.

The postings will be:

• Debit or credit to Purchases Clearing (depending on whether your quantity is positive or negative)
• Debit or credit to the Purchases Variance account.
  
  

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