Things to be Checked before passing entry by Accountant

An AP accountant should check the following points before passing an expense entry

• Whether expense approved by correct person as per Expense Authorization Matrix as per Company Policy
• Whether approval is by correct mode as per company policy(Mail Approval in case of MNC,Voucher Sign in case of Indian Co,Travel Expense form for travel bills,sign on bill etc)
• Whether proper quotations from different vendors obtained as per Company policy
• Vendor Selected by Purchase Dept/Admin Dept/IT Dept as per Company Policy
•  Selected  vendor given PO(Purchasse Order mentioning the details of purchase made)
• Check price  and payment terms as per PO with invoice
• Person receiveing the goods(STORES) sign GRN(Goods receipt Note) mentioning Quantity
• Accountant should match invoice qty with GRN

Example

In Case of Purchase Entry

INVOICE  Received of PURCHASE of 100KG*100/kg=10000

PO is of 300KG*90/kg=270000

GRN 80 KG RECEIVED

WHAT IS ENTRY?

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OPTION 1

PURCHASE DR 80KG*90=7200

            TO PARTY                         7200

(Qty should b as per GRN(Actually received qty and Rate should be as per PO as already decided)

OR

OPTION 2

PURCHASE DR 100*100=10000

            TO PARTY                         10000

DEBIT NOTE FOR QTY SHORE RECD

PARTY DR                             2800

             TO PURCHASE                 2800

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What is an Open PO?

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If whole Quantity of PO(Puchase Order) is not yet received,it is called open PO

A single PO may cover a number of invoices/GRN

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What is the procedure to be followed In Case of Services

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Normally for Services, there are agreements, hence approval not required

In case of Agreements,we should maintain Agreement Tracker in Excel mentioning

1. Agreements Entered
2. Expiry Date
3. Amt

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What is to be done in case Some Document missing/Some Approval Missing?

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• If some problem,send mail immediately to concerned person/vendor
• If everything ok,pass entry

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