Purchase Order Invoice: When Product Receipt Is Higher Than the Actual Invoice Amount

Once the quantities of items have been received on the delivery date in the purchase order process, you then indicate in Dynamics AX that the products have been received. Generally, since you are posting the product receipt for the same quantity for which the order will be invoiced, there is not a dollar amount difference between the product receipt posting and the invoice. However, when a different quantity is actually charged by the vendors, you can make adjustments to the postings during invoicing.

When the product receipt is processed, a Product receipt journal is created, and financial entries are booked as well. To review those General Ledger postings, click on Product receipt in the journal area, then click on Vouchers.

You will see in the Voucher transaction:

• A credit entry to purchase accrual account / accrued trade AP
• A debit entry to product receipt/inventory account

Invoicing the Purchase Order with Reduced Quantity from Vendor

Go to the Invoice tab then click on Invoice in the Generate button group. This will open the Vendor invoice window.

Enter the invoice number and a description:

On the purchase order Lines, change the amount to equal to the invoice received from the vendor.

In this case, the quantity was changed from the ordered and received a quantity of 100, to be invoiced at the quantity of 98. There are many reasons why you would be charged for less than the full received quantity by the vendor, for example, not being billed for the quantity received that is inferior in quality but still usable.

A pop-up window will appear stating: “The invoice update quantity is less than the quantity matched product receipt, the inventory cost for the items will be understated.” Click OK.

Another window will appear after confirmation, as a precaution to validate the invoicing changes.

Click Yes. The invoice quantity and line net amount will reflect the change:

Now you are ready to post the invoice.

In the Vendor invoice form, click Post in the Actions button group in the action pane. In the pop-up window, Select the posting settings, click Post.

To review the GL entries after invoicing this PO, click on Invoice in the Journals button group, and then click on Voucher.

 

The debits and credits of the Voucher transaction should display:

• Debit entry to purchase Accrual (reversing the accrual credit amount from the product receipt)
• Debit entry to inventory account (Purchase inventory receipt) with the new amount of 980.00
• Credit to the product receipt/inventory account (reversing the entry from the product receipt)
• Credit to the AP trade account/vendor balance with the new amount of 980.00