Using Microsoft Dynamics GP Purchase Order Processing in Job Cost

You can enter and edit purchase order transactions using Microsoft Dynamics GP Purchase Order Processing (POP). You can enter job-related information to link the purchase order to a job. You can also enter purchase order returns for purchase order that contain job costs.

When entering job information on a purchase order, all cost and item information goes to the job in Job Cost rather than to the Inventory module. If you wish to track purchase order items through inventory, you can first create a PO using the Unbilled product indicator for the items, then create an adjustment entry to the job.

If you need to create a return for a Subcontractor purchase order, see Entering returns on a subcontractor purchase order.

Creating purchase orders

Step 1: Complete the purchase order entry window

Choose Transactions > Purchasing > Purchase Order Entry.
Complete the window. See the Microsoft Dynamics GP Purchase Order Processing Manual for more information.

When copying a purchase order, Service and Job Cost information will not copy. Only the Microsoft Dynamics GP information will copy, and the Product Indicator field will be changed to Unbilled for all line items.

Step 2: Enter job-related information

From the Product Indicator drop-down list, choose Job Cost. Unbilled is for Microsoft Dynamics GP general ledger transactions.

If you marked the setup option to have the job number or cost code from the last line item entered as the default entry in the line you're entering, that information will already be entered. See Choosing Setup Options.
Enter a Job Number and a Cost Code.
Choose the expansion button attached to the Item field to open the Purchasing Item Detail Entry window.
Use the lookup in the Text ID field to add standard text to the purchase order. You can also use the expansion button to enter text to the line item. While they function similarly, the Text ID field allows more space than the Microsoft Dynamics GP Comment ID field. The description prints on the blank paper purchase order format.

Step 3: Commit the purchase order

Choose Commit to save the purchase order and update the committed costs in Job Cost. If you plan to print/email the purchase order, you do not need to commit.

The PO Status field shows New if the purchase order has not been printed, Open after the purchase order has been printed, and Modified if it has been changed after printing.
Choose File > Print. Upon printing and/or emailing the purchase order, the costs become committed costs for the job. Once a purchase order is committed, taxes are included with the item's cost in the Committed Costs column in the Job Status window and in the Actual column in the Cost Codes Detail window. To view the tax portion of the costs, you can zoom on the appropriate cost column in the Job Status window. Landed costs are not included in the committed cost amount.

If you are using the Microsoft Dynamics GP Multicurrency Management module, you can toggle the display between the originating currency listed in the Currency ID field and the functional currency by choosing the multicurrency button.

Receiving purchase order items

When purchase order items or their invoices are received, you can use the Receivings Transactions Entry window to acknowledge and post the transaction.

Choose Transactions > Purchasing > Receivings Transaction Entry.
Complete the Receivings Transactions Entry window. See the Microsoft Dynamics GP Purchase Order Processing Manual for more information.

Costs in the Committed Costs column in the Job Status window move to the Posted Costs column after the receipt is posted. Landed costs are included in the posted costs.

If you are using the shipment types, you can also enter items line-by-line, then choose Transactions > Purchasing > Enter/Match Invoices to choose the items received.

Entering purchase order returns with job costs

You can now perform purchase order returns for purchase orders that contain Job Cost costs. This feature supports PO returns with and without credit, and batch and transaction-level posting. This feature will not support the processing of returns against inventory transactions, as those can be performed using the current alternate Inventory Transaction Entry window.

Additional notes about PO returns with Job Cost:

When a return is processed that contains Job Cost items, those items will be reversed on the job.
Taxes on PO returns will update per the Suppress PO line item tax update to Job Cost and Service Management option in setup. If this option is turned on, taxes are not included in the total costs.

A purchase order must be committed and received before you can enter a return for that PO.

The purchase order return process: a quick review

The PO return process works as follows.

Shipment only

Create and save purchase order. PO status is NEW.
Receive and post the shipment. PO status is RECEIVED.
Create purchase order return. PO status remains RECEIVED. If a replacement item will be shipped, you can edit the purchase order and change the status to CHANGE ORDER. Then you could add the replacement item right on the original purchase order.

Shipment with Invoice

Create and save purchase order. PO status is NEW.
Receive shipment/invoice. POS status is CLOSED
Create purchase order return. PO status remains CLOSED.
Post credit transaction to Payables Management. If a replacement item will be shipped, you can edit the purchase order and change the status to CHANGE ORDER. Then you could add the replacement item right on the original purchase order. When you view the PO, both line items will be CLOSED.

Returning a purchase order item

You create a PO return as you normally would except that you can now view jobs associated with the return.

Choose Transactions > Purchasing > Returns Transaction Entry. The Returns Transaction Entry window opens.
Choose a return type. You must choose either Return or Return W/Credit. Tab through to fill the Return No.
Fill the remaining fields, as necessary. For additional information on the fields listed below, refer to the Microsoft Dynamics GP documentation.
- Vendor Doc. No.
  The number identifying the document that the vendor gave you; typically this is the invoice number or packing slip number from the vendor's documents. You can leave this field blank if you're entering a return without credit.
- Date
  The date the item is to be returned. The system date fills automatically.
- Batch ID
  The batch associated with this purchase order, if applicable.
- Vendor ID and Name
  The vendor associated with the item being returned.
- Currency ID
  The currency ID of the returned item fills automatically.
- PO Number
  The purchase order number to which the returned item belongs.
- Vendor Item
  The item being returned.
- Receipt No.
  The receipt number associated with this returned item.
- U of M
  Displays the unit of measure for the item being returned.
- Quantity Returned
  The quantity to return. This field fills automatically with the maximum quantity available from the receipt.
- Unit Cost
  Displays the cost of the item in the unit of measure.
Tab to the next line. You can now view the jobs and/or service call associated with this returned item. See Viewing job information for a PO return below.
Save or post the transaction. If a return transaction results in a net $0.00 cost for the PO line item and you are using a price matrix where the first row begins with Starting Cost of $.01 or higher (see example below), you will receive an error because the system will not be able to calculate the extended markup for $0.00. To avoid this error, you should change the starting cost in the first row of the price matrix to $0.00.

Viewing job information for a PO return

Choose Extras > Additional > Signature PO Return.
Choose OK to close the window.

Viewing updated costs in Job Cost

When a PO return has been posted, the appropriate costs are updated in Job Cost, as applicable. To view updated costs in Job Cost because of a PO return:

Choose Inquiry > Job Cost > Job Status. The Job Status window opens.
Choose a job associated with the purchase order.
Zoom on a Posted Cost for that cost element. The Cost Code Summary window opens.
Zoom on the Cost Code. The Cost Code Detail window opens.
Choose View Transactions. The Transaction Summary window opens. The purchase order return transaction contains a transaction type of POR.
Double-click the transaction to open the Returns Transaction Inquiry Zoom window. This provides additional details about the PO return.

Entering returns on a subcontractor purchase order

If you have a purchase order for a job and cost code for a subcontractor with retention and have received the materials and posted a receiving transaction, but need to create a return, the recommended way to undo a purchase order that was issued and received is to finish the transaction by doing an invoice match and then enter a credit memo through the Payables Transaction Entry window.

While we do get requests to do a negative PO line or an “undo the receiving” type of concept, this is not the design of GP Returns. While legacy systems may have a negative PO line concept, GP returns is better because of its ability to handle inventory either being sent back or flagged as damaged as well as creating the credit. Typically the user could go to the Dynamics GP Returns Transaction Entry to do the return, but because this is a subcontractor cost in job cost the return transaction is not allowed. However, you can create the return by completing the following steps.

In the steps below, the example described consists of:

Purchase Order: $10,000
Received Amount: $4,000
Retention: 10%
Tax Exempt: Yes

Committed costs are not added back for returns.

Step 1: Complete the transaction in Invoice Match

In order to undo the receiving transaction, it is recommended that the user complete the transaction through the invoice match process like any other received PO. Transactions > Purchasing > Enter/Match Invoices.

Complete the invoice match transaction and make note of the Document number for future reference.
After completing the invoice matching, the invoice is now recognized along with the retention withheld in the Subcontractors Maintenance window. The transaction is through payables but will not be paid.

Step 2: Issue a credit memo

To update the job, Subcontractors Maintenance window, and the payables transaction the recommended approach is to issue a credit memo through the Accounts Payables Transaction Entry window.

Open the Accounts Payable Transaction Entry window. Transactions > Purchasing > Transaction Entry
Select the Vendor.
Enter the full amount of the invoice $4,000 in the Payables Transaction Entry window.
Select the Distributions button.
In the Payables Transaction Entry Distribution window, select the Job Number and Cost Code.
Tab off the Cost Code field, to automatically insert the Retention Payable record.
Select OK.
At this point, the payable record and the general ledger transactions have all been updated properly. There are a couple more steps to clean up the job. After leaving the distribution window, the Payables Transaction Entry window will revert to $3,600 for the payables amount because the retention amount of $400 is now calculated.

Step 3: Release the invoices

Release the invoices from the Subcontractor Payments window by going to Transactions > Job Cost > Subcontractor Payments and select the Process button.
Release the retention from the Subcontract Transactions window by going to Transactions > Job Cost > Subcontractor Retention and select the Process button.
At this point, the posted costs have been removed from the job.

Step 4: Reconcile the Subcontractor Maintenance window

You will need to run the Reconcile Subcontractors to update the Subcontractors Maintenance window to display the Retention Invoices correctly. (The credit memo retention is being added to the field rather than deducted.) The Retention Invoices field should be $0, instead it is showing $800.

To run the Reconcile Subcontractors utility, go to Tools > Utilities > Job Cost > Reconcile Subcontractors.
Enter the Job Number.
Select Reconcile.