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?
View AnswerOPTION 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
What is an Open PO?
View AnswerIf 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
What is the procedure to be followed In Case of Services
View AnswerNormally 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
What is to be done in case Some Document missing/Some Approval Missing?
View Answer- If some problem,send mail immediately to concerned person/vendor
- If everything ok,pass entry
Subscribe to our Youtube Channel - https://you.tube/teachoo
