Resolving Purchase Order Discrepancies Answered
I have a query on best way to resolve a purchase order discrepancy.
In our business workflow with our supplier we create the PO and allocate the invoice to the PO so that it pushes to Xero for the vendor payment process. We have terms of ex-works and payment is due on collection. This works fine but recently a container missed several items the supplier will put onto back order for a future shipment.
We have an integration to Xero so the payment recorded for this PO is now higher than the adjusted PO by virtue of the fact we have created a Back Order PO. What is the best way to resolve the value difference?
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Hi Chris,
Thank you for sharing your query! Here are two possible solutions to address the situation with backordered items and the corresponding payments in Xero:
Option 1: Update the Original Bill in Xero
When you update the original bill in Xero to exclude the backordered items, any payment applied that exceeds the adjusted bill amount will automatically become an overpayment. This overpayment will be available to allocate to a future bill from the same supplier.
If you choose this option, ensure that the backorder is imported into Xero. This allows you to apply the overpayment to the backorder and ensures that Xero accurately captures the overall inventory value.
Option 2: Leave the Original Bill Unchanged in Xero
Alternatively, you may leave the bill in Xero unchanged if you are confident the missing stock items will be received as part of a backorder. When creating a backorder in Cin7, make sure to select the option "Backorder Non-Received Items (Invoice Original) from Admin screen > Action menu"
This option ensures the backorder copies the accounting status of the original order. For example, if the original order has been imported into Xero, the backorder will also have an 'imported' status. As a result, the backorder will not appear on the Xero dashboard for import. This option will result in two purchase orders in Cin7 (original and backorder) but only one original bill in Xero.
Both solutions depend on your workflow preferences and how you wish to manage accounting records. Let us know if you need further clarification.
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