Purchases Clearing Report

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. 

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