An AP accountant should check the following points before passing an expense entry
- Whether expense approved by correct person as per Expense Authorization Matrix as per Company Policy
- Whether approval is by correct mode as per company policy(Mail Approval in case of MNC,Voucher Sign in case of Indian Co,Travel Expense form for travel bills,sign on bill etc)
- Whether proper quotations from different vendors obtained as per Company policy
- Vendor Selected by Purchase Dept/Admin Dept/IT Dept as per Company Policy
- Selected vendor given PO(Purchasse Order mentioning the details of purchase made)
- Check price and payment terms as per PO with invoice
- Person receiveing the goods(STORES) sign GRN(Goods receipt Note) mentioning Quantity
- Accountant should match invoice qty with GRN
Example
In Case of Purchase Entry
INVOICE Received of PURCHASE of 100KG*100/kg=10000
PO is of 300KG*90/kg=270000
GRN 80 KG RECEIVED
WHAT IS ENTRY?
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OPTION 1
PURCHASE DR 80KG*90=7200
TO PARTY 7200
(Qty should b as per GRN(Actually received qty and Rate should be as per PO as already decided)
OR
OPTION 2
PURCHASE DR 100*100=10000
TO PARTY 10000
DEBIT NOTE FOR QTY SHORE RECD
PARTY DR 2800
TO PURCHASE 2800
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What is an Open PO?
If whole Quantity of PO(Puchase Order) is not yet received,it is called open PO
A single PO may cover a number of invoices/GRN
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What is the procedure to be followed In Case of Services
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Normally for Services, there are agreements, hence approval not required
In case of Agreements,we should maintain Agreement Tracker in Excel mentioning
- Agreements Entered
- Expiry Date
- Amt
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What is to be done in case Some Document missing/Some Approval Missing?
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- If some problem,send mail immediately to concerned person/vendor
- If everything ok,pass entry
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