SPLITTING AN ITEM COST ON A PURCHASE ORDER

DESCRIPTION:

When an item is ordered, the system posts this item to a single general ledger account number.  There needs to be a way to split the cost of this item to more than one department/account number.

SOLUTION:

In Data Plus, there is a function in Accounts Payable/File Maintenance called Auto Distribution.  This is used for a number of purposes, but can be used in the situation where an item being ordered needs to be split among multiple departments/accounts. 

Here is an example:

Bath Towels are being purchased.  The cost is to be split between Rooms (dept 10), Health Club (dept 190), and Spa (dept 270).  The purchase order will be created as usual.  The only difference is once the item is moved to the PO (see illustration below), the line must be opened to show the detail. 

To get to the line item detail, double click on the line.  The following screen will appear:

Click on the down arrow to view the Auto Distributions that currently exist.  

Please note this list is maintained in Accounts Payable.  In order to add to this list, the user must have access to Accounts Payable>File Maintenance> Auto Distributions.  To add a distribution here, click Ctrl+G.  Then press F5 to insert.  The screen should look like this:

Auto Distribution Code:                 A unique code to identify this distribution

Force Property Substitution:           In a multi-property database, this same distribution can be used in other

                                                        properties.  The system will automatically substitute the property ID if

                                                        this is answered ‘yes’.  If this is only for a single property, answer ‘no’.

                                                         In a single property database, this field is not accessible.  

Description:                                     This will display in the list of distribution codes.

Once these fields are complete, press F2 to continue.  Enter the general ledger account numbers this distribution code should affect.  It can be as many accounts as needed, as long as the total equals 100%.  With each account number and percentage amount, press F2 to enter the next account number and percentage. In this example, there are three accounts:

Once the distribution code is complete, escape back to the purchase order detail screen and enter the new distribution code.  Complete the purchase order as usual. 

NOTE:   This distribution code does not affect the accounts used in the posting of the receipt.  When this item is received, the system will credit the inventory accrual account and debit whatever the default inventory/expense account that is for this item.  In this example, the default Inv/Expense account is 000370000001.  The splitting of the expense accounts occurs in the posting of the invoice in Accounts Payable.

When the invoice is applied in AP, it should be done through the Purchasing/Receiving Interface as shown below:

 (This is just a sample screen.  Entering an invoice in this interface is covered in another tech note)

When the invoice is applied to the receiving, the following occurs:

1) The amount posted (to the Inventory Accrual account when it was received) is reversed.

2) The amount posted (to the Inventory account when it was received) is reversed.

3) The AP Trade account is posted to in place of the Inventory Accrual account.

4) The accounts identified in the Auto Distribution Code are posted to in the place of the original Inventory/Expense account.

The invoice would be posted as normal.

If there are any questions, please contact Data Plus Support.