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Zenon

Purchases Clearing Report

1 minute read time.

Purchases Clearing Report can be used to simplify month-end reconciliation of the purchases clearing account balance with open amounts on purchase order. The purchases clearing account is a liability holding account that contains inventory received in Receipt of Goods Entry without full invoicing until all invoices are posted in Process Receipt of Invoice (partial receiving and invoicing in Sage 500 is allowed). This account is credited when goods are received into inventory. When the applicable invoice is recorded, it is debited and the corresponding Accounts Payable liability account is credited. The balance in  Purchases Clearing Report  should match the balance  of Purchases clearing account in the General Ledger. Purchases clearing account is assigned in Set Up PO Options and  is a temporary liability account.

This report reflects only transactions entered in the Purchase Order module. An out of balance exception can occur if any transactions posted to purchase clearing general ledger account from another module (typically GL , AP, or IM) and they will have to be reconciled separately. For example, invoices entered in Accounts Payable Invoice Data Entry do not affect this report. 

How frequently should you review purchases clearing report and the clearing account? The Purchases Clearing Report  should be worked at least once a month to help complete open Purchase Orders, and also to identify potential processing problems. Using GL Explore task GL Account Transactions to get the list of all transaction that posted to purchases clearing account is the tool on GL side to be used. In the explorer you can summarize GL Account Transactions by batch ID or transaction type and anything that is not originating in PO module is an immediate suspect. Periodically you might try to plot the total dollar amount in the purchases clearing account on a trend line. If the balance in the account is perpetually going up, then there are probably  issues clogging up the account.

The challenge with the Sage 500 Purchases Clearing report is that it always reflects data as of the current moment in time. 

  • in reply to Darlene Hetman

    You should start another thread on this. Posting against Zenon's blog post doesn't inform anyone of a new reply.

    In general, you should research the GL postings, they might have reversals and the client needs to indicate why they are posting directly to this account. Verify the account is classed as an asset or liability, depending on how they want to see it on their balance sheet. The trial balance is only a summary, typically for the entire period, so it is not the best way to match or research the outstanding transaction amount sources. Also, the clearing report should be run with no restrictions, except the  Posted Date. That date should be used in all GL reports, BIE, etc. used for researching the balance.

  • in reply to Contefication

    Thank you for your response.  All of the GL BatchID's originate in PO.  They have one or two from GL that they can account for.  It seems to us that it is some timing issue of how the Purchase Clearing Report looks at dates vs the GL Trial Balance because it will "fix itself" the next month.

  • in reply to Darlene Hetman

    Darlene,

    In my experience, clients hardly ever configure or use the clearing accounts properly. They tend to either use the suspense account for general purposes like this, use an account that also receives transactions from other subledgers, use an expense or income account, or frequently make GL adjustments.

    Instead of using the summary in the Trial Balance, review the GL Transactions in detail for the fiscal periods in question. Even if the client is posting in summary, you will still see the batch types and journals used in the posting. Any posting originating outside PO (POVO, PORG, PORT, etc.) should be investigated.

  • Has Sage or anyone created any reports or views to identify discrepancies between the PCR and GL Trial Balance.  We have a client that is sometimes seeing a substantial discrepancy on the last day of the period between the PCR and the GL Trial Balance, but at some point in the next period it corrects itself and the PCR and GL Trial Balance match.  Not every month, just occasionally.  We think it is due to transactions crossing periods...but not sure how to identify those.

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