Purchase Order Rounding

The Purchase Order module allows for the specification of General Ledger accounts to be used for tracking differences encountered between vendor invoice/credit totals and the distribution determined from the Profits Plus system as these vendor documents are entered.  These differences may be from the use of varying rounding methods, different interpretations of how discounts are handled, mathematical errors, and data entry errors.  To add the General Ledger accounts so the system can read them, go to:

• Purchase Order (Module 7)
  • System Management Functions (Task 32)
    • Modify Parameter File (Sub-task 22)
      • Vendor Invoice Entry (Option 3) AND 
      • Credit Memo Entry, selections #3 & 5

Look for the parameter:  DFLT'DIF'ACT    This parameter is for specifying round accounts.  They generally are set to use the same GL account number, but may be different.

There are several schools of thought on how to use 'difference' accounts:

1. Use an invalid ("unknown") account so that all differences should be accounted for by line items and/or resolving differences.  This is fine if minor rounding differences are NOT a normal occurrence.

2. Set the difference account to a high dollar volume asset account or the one where most of the rounding would normally occur.  This is fine if minor rounding differences ARE a normal occurrence and you want to blend them into an asset account instead of tracking them separately.

3.*(Suggested method) Setup a rounding/difference/discrepancy account in the General Ledger and set the P/O difference accounts to use it.  This gives the best audit control and keeps the asset accounts more accurate.