Quickbooks Enterprise and the confusion Advanced Inventory creates with accounting.

Well, I guess we’re not in Kansas anymore.  QB has grown up and is growing up.  It treats certain accounting methods now like a more grown up and sophisticated ERP accounting system.

Let’s take Advanced Inventory for example.  Now, with Advanced Inventory added to QB Enterprise we can separate the functions of receiving the inventory on a PO and the actual receiving of the bill for the inventory from the vendor.

How often do you get the inventory receipt and the bill from the vendor at the same time?  Hardly ever, unless your paying by credit card.

Now you produce your purchase order to the vendor.  Then inventory is delivered and you do the receipt in QB.  Later when the bill arrives you process the bill in QB.  This process sets up the accrual to a GL account typically called accrued purchases.

When the purchase order receipt is done in QB Enterprise with Advanced Inventory, the Inventory GL Account is debited, and the Accrued Purchases account is credited.  Later when the bill from the vendor is process the Accrued Purchases account is debited and the Accounts Payable account is credited.

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