About Approving Customer Shipments

Order Shipping

The system provides the ability to record journal entries to relieve Inventory In Process and record expenses to the Cost of Goods Sold - In Process accounts defined on the Distribution Accounts and End User Type forms. For customers with Shipment Approval Required selected, the journal entries are created with a journal id of CO DIST. The journal entry takes this form:

Debit	Credit	Transaction
Dr		Cost of Goods Sold - In Process
	Cr	Inventory In Process

The journal entry date is the shipping date. The processing of negative quantity shipments can not exceed the quantity unapproved. If a larger negative quantity shipment is required, reduce the quantity approved to a level sufficient to allow for the negative quantity. If the customer order Shipment Approval Required check box is selected and the Cost of Goods Sold In Process Accounts or Inventory In Process Accounts are not populated, the system prevents the line from being shipped.

Customer Approval

The system provides the ability to indicate customer approval by recording the quantity approved by the customer. Upon approval, a journal entry records Cost of Goods Sold by relieving the Cost of Goods Sold In Process account entries recorded during the order shipping process. The journal entry takes this form:

Debit	Credit	Transaction
Dr		Cost of Goods Sold
	Cr	Cost of Goods Sold - In Process

A second journal entry records inventory by relieving the Inventory In Process account entries recorded during the order shipping process.

Debit	Credit	Transaction
Dr		Inventory In Process
	Cr	Inventory

The Journal entries for both entries have a journal id of CO DIST.

A second set of journal entries is created with a journal id of AR DIST. The journal entries take this form:

Debit	Credit	Transaction
Dr		Accounts Receivable In Process
Dr		Sales Discount In Process (optional)
	Cr	Sales In Process
	Cr	A/R Tax Acct In Process

The value for the quantity approved can be changed multiple times using values that range between the quantity invoiced and the quantity shipped. In the case of subsequent updates that follow the initial approval, the costs used by the new journals are based on the change quantity approved. When decreasing the value for quantity approved, the journals are Dr Cost of Goods Sold - In Process and Cr Cost of Goods Sold, CR Inventory In Process and Dr Inventory as well as Dr Sales In Process and A/R Tax Acct In Process and Cr Accounts Receivable In Process and Sales Discount In Process.

The value for the quantity approved can be adjusted for order shipments having a value for quantity invoiced that is less than the quantity shipped. No further changes are permitted once the quantity invoiced value matches the quantity shipped. Order Shipment Approval Log records are created for every entry made in the quantity approved field. If the customer order Shipment Approval Required check box is selected, these account fields must be populated or the system prevents the line from being approved:

• Cost Of Goods Sold In Process Accounts
• Inventory In Process Accounts
• Accounts Receivable In Process Account
• Sales Discount In Process Account if line has a discount
• Sales In Process Account
• A/R Tax Acct In Process if the line is taxable

Order Invoicing

For customer orders where Shipment Approval Required has been selected, the system provides the ability to invoice only those order shipments that have a value for shipment approval quantity that exceeds the quantity invoiced and the invoice date is later than or equal to the approval date. For customer orders where the Shipment Approval Required has not been selected, invoicing includes all order shipments that have not yet been invoiced. Journal entries are created to reverse the shipment posted accrual entries and then create AR invoices and attendant journal entries with a journal id of AR DIST which takes this form:

When the invoice is created these accounts get posted.

Debit	Credit	Transaction
Dr		Sales In Process
Dr		A/R Tax Acct In Process
	Cr	Accounts Receivable In Process
	Cr	Sales Discount In Process (optional)

After the invoice is posted these accounts get posted.

Debit	Credit	Transaction
Dr		Accounts Receivable
Dr		Sales Discount
	Cr	Sales
	Cr	A/R Tax Acct

Consolidated invoicing

Shipment Approval Required Shipment Approval Required

When the invoice is created these accounts get posted.

Debit	Credit	Transaction
Dr		Sales In Process
Dr		A/R Tax Acct In Process
	Cr	Accounts Receivable In Process
	Cr	Sales Discount In Process (optional)

After the invoice is posted these accounts get posted.

Debit	Credit	Transaction
Dr		Accounts Receivable
Dr		Sales Discount
	Cr	Sales
	Cr	A/R Tax Acct

Shipment Approval Required

• Accounts Receivable In Process Account
• Sales Discount In Process Account if line has a discount
• Sales In Process Account
• A/R Tax Acct In Process if the line is taxable