PO and NON PO Invoices

[sandy love]

Hi All,

Below are some Accounts Payable related queries:

a) Whom you say is a PO invoice or a Non PO invoice? Explain with examples.

b) Is there any relation of Goods with PO invoices?

c) Please read the following scenario:
1) A PO raised for 10 items worth $1000, GRN received for 9 Items
and invoice received worth $1000.
2) A PO raised for 10 items worth $1000, GRN received for 10 Items
and invoice received for 9 items worth $1000.
3) A PO raised for 10 items worth $1000, GRN received for 10 Items
and invoice received for 10 items worth $990.
In the above given cases what should and Accounts Payable person should do?

d) How you define quotation?

e) What is 3 way matching concept and 2 way matching concept? Please explain.

f) If in 3 way matching concept a discount is being allowed by the
vendor then what all documents an AP person needs before booking an
invoice apart from PO, GRN and Invoice?

Please share your view on the above mentioned questions.

Thanks and Regards,
Sandy

[sekar sekar]

1. po invoice means, u have agreed the prices and quantity before delivery of the product or service and then u get the goods and serviceand then u receive the invoice. it is called po  based invoice

non po based invoice means, there will be some urgent works or bills where there is no purchase order.. it is based on approval limits and  authority to spend. Based on certain approvals and finance approvals we proces these invoices. eg. Request for Payment and Release orders.

2 oher questions.. u can call me i can explain u in more detail.

Sekar.

9840654619.

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Sekar

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[sandy love]

Hi Sekar,

Thanks for your reply!

So as per you all the invoices containing a purchase order are PO
invoices rest all are Non PO invoices? So if a bolt manufacturing firm
raise a PO for 10 Laptops then in this case is it a PO invoice?

Also I would like u to share your views over the portal so that if
anybody else wants to know can get this info.

Warm Regards,
Sandy

[Krishna Nutakki]

surely,this is PO invoice

[Amit Kumar]

b) Is there any relation of Goods with PO invoices?

 

An invoice is a document that is issued from a SELLER to a BUYER. This would be something that a business or contractor would send out to a customer or client who has or is purchasing a product or service. An invoice can also be called a bill or a billing statement and it is generally a document that details the services that have been or will be provided (or the items purchased), quantity, price, and other details. By accepting an invoice, a BUYER is basically making a contractual agreement to make the purchase.

A purchase order is a document that is issued from a BUYER to a SELLER. A buyer who is interested in making a purchase of products or services sends the document to the seller. A purchase order will also detail the services or the items to be ordered or purchased, including the quantity, price and other details. A purchase order also serves as a contractual agreement. The buyer is agreeing to make the purchase, and the seller, upon accepting the purchase order, is agreeing to provide the goods or services according to the specifics in the purchase order.

It is important to remember that details can be negotiated and changed and human errors are made. So, if there is a wrong amount on an invoice or purchase order-or something else changes-it can be renegotiated, changes made to the document, and the final agreement carried out.

On Wed, Apr 11, 2012 at 10:39 PM, sandy love <sandy.2...@gmail.com> wrote:

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  Regards & Thanks

       

        Amit Kumar

[Amit Kumar]

How you define quotation?

The highest bid or lowest ask price available on a security at any given time. also called quote.

On Wed, Apr 11, 2012 at 10:39 PM, sandy love <sandy.2...@gmail.com> wrote:

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[sekar sekar]

Hi Sandy,

I just felt tough for typing the answers: 

Below are the answers:

a) Whom you say is a PO invoice or a Non PO invoice? Explain with examples.

ans: already answered.

b) Is there any relation of Goods with PO invoices?

one po is raised, goods will be delivered, at the time delivery GR will will be created. called Goods receipt. After that We will get invoice from the supplier. While processing the invoice, if u type the po number, you will get the list of GRs for that PO. then u have to match ur GR with the IR.IR-Invoice receipt. This is also called as Two way matching.

c) Please read the following scenario:
   1) A PO raised for 10 items worth $1000, GRN received for 9 Items
and invoice received worth $1000.

ans: You can ask the supplier to supply the tenth item and put the invoice on hold. this is one option.

         Second option, pay for the nine invoices and dont pay for the tenth item. second option

Third option, process the invoice for the full value and create a debit note for the value of tenth unit third option.

Fourth option process the entire invoice and deal with the tenth item separately. It is depending on the situation and company policy it will be decided. First three options are equally good.

   2) A PO raised for 10 items worth $1000, GRN received for 10 Items
and invoice received for 9 items worth $1000.

ans: First ting raise a query with the supplier and ask him to produce the invoice for ten items.  and put the invoice on hold. 

Second option, If the supplier has given the invoice by  mistake, u can match the ten items and process that invoice.

If the price has been increased,; check or escalation clause in the PO. If provided, process the invoice Or after getting approval from ur company management, process the invoice for the higher price. They can permit so, if the goods is very much essential and stopping the payment may lead to stopping the supply of goods by the supplier which may cause a further loss.. so they may approve to process the invoice.

   3) A PO raised for 10 items worth $1000, GRN received for 10 Items
and invoice received for 10 items worth $990.

Ans: check any discount provided by the supplier. If provided, take to revenue.(the discount portion).

If the supplier has not provided for any discount in the invoice, he has billed less, go ahead and process the invoice, based on conservatism concept. We can treat it as if reduction in the selling price. Some times the supplier do this go give some benefit like reduction in central excise or some tax benefits or reduction of service tax or some other expenses. They do so for better future business relationship.

In the above given cases what should and Accounts Payable person should do?

d) How you define quotation?

Ans. Quotation is defined as a statement in which the supplier mentions at what price he can supply the goods or provide a specific service. Mostly this will be in reply to a tender invited by the company. Some times the suppliers themselves send their quotations to the other producers and sellers, that they can provide such goods orservices at these prices. These are voluntary quotations to capture new business.. Mostly new manufacturers and service providers have to do this to get new business.

e) What is 3 way matching concept and 2 way matching concept? Please explain.

Three way matching means matching the PO VALUE - GOODS RECEIPT - INVOICE

Two way -GR - IR

f) If in 3 way matching concept a discount is being allowed by the
vendor then what all documents an AP person needs before booking an
invoice apart from PO, GRN and Invoice?

Ans: Dont have a clear answer. May be we can check the communication from the supplier regarding the discount.

If you have further doubts, feel free to call me or mail me. Some answers you can directly get from google also.

Please share your view on the above mentioned questions. 

Thanks.

Sekar.

9840654619

[Deepak Nachankar]

Hi Sandy,

 

Sekar has explained the case in so much detail. I appreciate Sekar for the sharing such information.

Thanks Sekar.

 

Rgds,

 

Deepak Nachankar

Siemens ltd

[sekar sekar]

Thanks Deepak.

Sekar.

[sandy love]

Hi Sekar,

Thanks for your valuable time and information.

You have explained each and every question in detail though I still
have 2 doubts with me.

a) If any PO is raised for any other product apart from our goods (raw
material) then is this a PO invoice raised by the vendor? say, a PO is
being raised by a manufacturing company (a manufacturer of clothes)
for 10 laptops for its IT department then is there again a 3 way
matching concept will apply? and the invoice raised against this PO is
a PO invoice?
(I know it seems like a stupid question but I want to clear it at my end)

b) Can u please explain 2 way matching concept again with some example.

Best Regards,
Sandy

[sandy love]

Hi Krishna,

Thanks for your reply!

So in this case do we apply 2 way or 3 way matching concept?

Regards,
Sandy

[sandy love]

Hi Amit,

Thanks to replying my queries, can you please explain the difference
between PO and Non PO invoices?

Regards,
Sandy

> * Regards & Thanks**
> *
> * *
> * Amit Kumar
> *

[sekar sekar]

Hi Sandy,

a) If any PO is raised for any other product apart from our goods (raw
material) then is this a PO invoice raised by the vendor? say, a PO is
being raised by a manufacturing company (a manufacturer of clothes)
for 10 laptops for its IT department then is there again a 3 way
matching concept will apply? and the invoice raised against this PO is
a PO invoice?
(I know it seems like a stupid question but I want to clear it at my end)

Ans: Whatever be the goods or raw material or service the concept is same. the three way concept applies.

b) Can u please explain 2 way matching concept again with some example.

Ans. two way matching is mainly for production goods or raw materials..where there is no need to check, it will be a routine supply of similar goods in bulk at standard prices. even the processor also knows them. Also since it will have a GR, it will automatically show the price. we need to just match the GR for the invoice that we are processing. Once u type thepurchase order, it will show all the GRs open for this supplier.

Thanks.

Sekar.

[sandy love]

Hi Sekar,

Thanks a lot buddy!!

I appreciate your efforts and knowledge. Thanks for providing so
valuable information.

[Nagaraju.Sarla]

Dear Sekar,

You are doing great help to our friends. Thank you very much
for your kindly information. And I have a question for you.

1Q: Z Ltd is a Manufacturing company usually they will make PO while
purchasing raw material & Packing materials. Once receiving those
materials they will make GRN and Purchase invoice.

Now they wanted to purchase some other items which not related
to manufacturing. This is for office (Office related items like Lap
Top and software items) and Capital goods also. For this, what they
have to do?

Will they raise PO, GRN and Purchase invoice?

Is it correct?

--
Regards,
Nagaraju.Sarla MBA
Mob:08147870944,09014644981.
________________________________________________________________________________
Chant Hare Krishna Manta and be happy.

[Amit Kumar]

yes they can

[Nagaraju.Sarla]

How it is not related to production how then can make inventory
related entries. how they will claim VAT.

My question is it is not purchase it is expenses how they will do?

> * Regards & Thanks**
> *
> * *
> * Amit Kumar
> *
>

[Nagaraju.Sarla]

How! it is not related to production how then can make inventory

related entries. how they will claim VAT.

My question is it is not purchase it is expenses how they will do?

[arjun.c...@gmail.com]

Yes, however it depends on organizations purchase preference. Some organizations have a policy of "no PO no Pay" that mean anything you order should have a PO, even for services as well you can create a blanket PO. PO acts as control and GRN account is a control account which helps to have proof of delivery in case of big organizations.
For below case depending on organizations pay policy you can create PO or directly pay it as Non-PO.

Sent from BlackBerry® on Airtel

-----Original Message-----
From: "Nagaraju.Sarla" <nagaraju...@gmail.com>
Sender: icwap...@googlegroups.com
Date: Fri, 13 Apr 2012 13:03:19
To: <icwap...@googlegroups.com>
Reply-To: icwap...@googlegroups.com
Subject: Re: {ICWA Portal} PO and NON PO Invoices

[sekar sekar]

Hi,

PO and GR are not compulsary for all purchases/expenses. It is followed for regular and mostly production materials. This is to ensure proper quality and to avoid excess payments and excess pricing by the suppliers. This is one of the best practices.

But for emergency or one time purchases, it is not necessary to have gr and po. You can directly go ahead and purchase and make it as a purchase entry if any tangible product comes in like raw material, tools,parts etc..  You can straight away process the invoice by hitting purchase or expense account appropriately after getting the necessary approvals.

You need to book as expense if it is invisible not tangible product comes in like, depreciation, stationary is an exception because it is use and throw..  other than that u should not unnecessarily hit the expense account.

You can very well claim the vat or tax benefits for these invoices too.

Thanks.

Sekar.

[Nagaraju.Sarla]

Dear Friend,


                I will agree with you. Please let me know that is it require GRN for capital goods. And how can we claim VAT or TAX Benefit for this.

Kindly let me know.

[sekar sekar]

Hi,

I think for capital goods GRN is not neccessary. I think as per our VAT, for capital goods u can get the credit in two equal instalmens. 50% first year and 50% in second year. I am not currently in touch with this subject. Just confirm it.

Thanks.

Sekar.

[Pradeep M]

Hi Mr Sekar,

Really the answers from you is too worthful to prepare for a Accounts Payable Job.

I Have some queries while preparing for an Accounts Payable interview. Kindly Help me

[Pradeep M]

Mr Sekar,

Your answers are really worthful. It helps to prepare for an Accounts Payable Interview.

I have some queries in Accounts Payable interview prparation. Kindly Help me.

Regards

M.Pradeep 

[Boovan]

 Hai Sandy,


PO Invoice: when you plan to purchase, you have to raise Purchase  order. PO contains, Rate of Quantity, No of Quantity, Colour, Specification of Goods.

Example: if you try to purchase mobile through Flipkart  or somenthing else.  when you are booking order, you have to  mention or you have to choose color, model, price quantity, your address, everything mention in the PO. This is called PO. if the supplier agree with you, they will send your goods based on PO.

NON - PO Invoice: without raising PO we have receive some invoice or bill. That is called Non- PO invoice.
Example. Telephone bill or electricity bill. based on you consumption they send invoice to you. this is called NON  - PO invoice.

Thank you

Boovan

[CMA Aashu]

dear all,

 is there any vacancy in your knowledge in Store & material management in any manufacturing company..? if so, kindly mail me the details on my e-mail id ashishgupt...@gmail.com or call me on my mob no 09760074222. I have 4.5 years of exp in the same field.

[CMA Aashu]

dear all,

 is there any vacancy in your knowledge in Store & material management in any manufacturing company..? if so, kindly mail me the details on my e-mail id ashishgupt...@gmail.com or call me on my mob no 09760074222. I have 4.5 years of exp in the same field.

On Wednesday, 11 April 2012 10:09:36 UTC-7, sandy love wrote: