This document will assist you in applying the Supplier Reconciliation functionality available in Palladium Premium Edition.
Probably the most important function that is overlooked in most businesses and not catered for in the “Traditional” Accounting Software program is that of Supplier Reconciliations. It is because of this, that Financials are generally misstated with belated Supplier Invoices getting processed after the fact. With our Supplier Reconciliation function, managers can print one Control Sheet that will display all the Reconciliations with all the Reconciling Items grouped. In addition you can even perform Zero-value reconciliations for completeness. In addition users can perform Reconciliations at any day, catering for Monthly, Weekly or even Daily Controls.
Setting Up Reconciliation Reasons
Users can set as many Reconciliation Item Types as required, in addition to the Standard types as displayed below.
Processing a Reconciliation
You can process a Reconciliation either by selecting the Supplier Recon icon or by drilling down from the Reconciliation Control Sheet. In terms of processing, once you have selected the Reconciliation Date, Palladium will populate the Supplier Balance for the selected date. Once you have entered the Supplier Statement Balance, you will be required to enter the variances and reasons in order to reconcile back to your Palladium System Balance.
Reconciliation Control Sheet
The reconciliation control sheet performs a dual function in that it displays a summary of the Supplier Reconciliations grouping the Reconciliation Reasons, but also acts as a proof of Evidence for the reconciliations completed, or not completed for a period, allowing management and external stakeholders like Auditors to be able to place additional reliance thereon.
Below is an example of the control sheet where you can see which Vendor Accounts have been reconciled and which haven’t. You will also see that accounts with Zero balance have also been reconciled from a completeness point of view. The columns in red show the different reconciling item types with the columns on the right totalling the balance on the left.
SUP130 -Download the PDF
The Purchase Order Approval Function allows for you to create a Purchase Order workflow authorisation function across the business to manage the related spend per Vendor as well as to set specific limits per Employee /Approver.
To activate the Purchase Order Approval function, access the Company Options function and the Payables / Settings tab, activating the feature and setting the default User Document Limits and Vendor Monthly Limits. Note that once this feature has been activated, you will be unable to create a Purchase Order without first converting it from a Purchase Quote.
Assign User and Vendor Limits
In the Accounts Payable Module, Maintenance Section select the Purchase Order Approver Icon. Here we will assign the various approvers, together with their Document Limit as well as the automated notification method.
You can also assign monthly Vendor limits to manage the spend on a per vendor basis. Should no limit be set then the Vendor will be afforded an unlimited monthly spend.
You can also setup default notification messages for the Email and/or SMS alerts.
Creating a Purchase Requisition
When you create a purchase Requisition you will need to select the relevant approver. Note that this will only display the relevant approvers based on their requisite Document Limit.
Approving a Purchase Requisition
On selecting the Purchase Order Approvals function each user will be presented with a list of Purchase Requisitions awaiting their approval.
Once you select a document you will be presented with the option to either Accept or Decline the document. On approval the Purchase Requisition will be converted to a Purchase Order.
Declining a Purchase Requisition
Should you decline a Purchase Requisition you will be able to set a Decline Reason code on the Purchase Requisition using the standard Authorisation reason codes.
This feature allows you to apportion addition costs to a specific batch of received goods. This could be used to assign costs such as Shipping or other transport costs or to apportion import duties for Additional Costs.
How Does This Feature Help Your Business?
This facility allows you to apportion other direct costs to a specific shipment, ensuring that you reflect a correct Cost Of Sales and Gross Profit margins.
This apportionment is applied as an accrual, alleviating the need to have the original Shipping cost invoices at hand.
Select The Original Supplier Invoice
In order to apportion costs to a specific batch of Received Goods, you first have to select the supplier invoice to which the additional costs will be apportioned. You can do this by selecting the Supplier Invoice and Select the Additional Cost option.
Once you have selected the Landed Cost Adjustment option, the system will display all the Relevant Inventory items on the Supplier Invoice. Here you enter the value with which you would like to apply to the Shipment, and the system will then give you the option to apportion these costs to the Delivery apportioned either by total shipment quantity or by value with the option to apply the apportionment manually. You also have the option to adjust the Additional Costs Control account.
Post Supplier Invoice
When you post the Vendors invoice, you would post this against the control account as shown above. It is recommended that a Cost Of Sale Account be used as a control account in order to ensure that all costs are accounted for appropriately.
Note – We also recommend that this account is reconciled monthly to ensure the accuracy of postings, as the account balance should invariably be Nil.
Download the PDF for this Support Document
The purpose of this feature is to optimise the inventory holding and ordering within the organisation by managing minimum and maximum levels with order lead times, a safety factor as well as an estimated number of days sales to stock in order to optimise in hand levels.
This function is a 3-step process as follows:
- First setup the delivery lead time, safety factor to apply and set up the number of days sales required in stock.
- Then run the inventory forecasting process. This function will calculate and average daily sales for the selected period and set the minimum and maximum inventory levels using the safety factor and required days sales.
- We then process the mass inventory order form allowing us to mass create the individual purchase orders per location per vendor.
You need to go to the Company Options Setup to determine whether you will create Purchase Orders or Purchase Requisition when processing the Bulk Reorder Process per the screen below. Note that you will only be able to create Purchase Requisitions if you are using the Purchase Order Approval function.
Inventory Masterfile Setup
Go to the inventory Masterfile and select the Reorder tab. Thereafter enter the details as below. Refer to the numbering in RED in the screen below.
- Reorder Point for all Locations – This will set the Max Level across allocations and is used to determine order points for the company – generally used for central store purchasing.
- Minimum Level – This is the Minimum level for all locations – associated with Centralised Ordering.
- Safety Factor – Safety factor used to calculate the Minimum Level.
- Order Lead Time (Days) – Vendor Delivery Lead Time.
- Days Sales In Stock – Number of Days Sales Stockholding Required.
- Economic Order Factor – The multiple on which to Order goods from your Vendor.
- Minimum Order Quantity – this is the least amount that can be ordered for this Item
Average Daily Sales – Average daily sales are calculated during the Inventory Forecasting process.
- Minimum Level – Minimum level used to trigger the reorder process, calculated as follows: (Order Lead Time x Average Daily Sales) x (1+ Safety Factor).
- Maximum Level – Minimum Level + (Days Sales in stock x Average Daily Sales) rounded up to Greater of Economic Order Factor or Min Order Quantity.
Now that you have setup the Reorder levels you need to generate the forecasting process as seen below with recommended new minimum and maximum inventory levels. The first thing you need to do is to determine whether this process is run per location or as an overall company (15). Then select the period on which you wish to forecast the daily sales, as depicted by point (1) below. As you can see you also have the ability to filter, or process, by inventory category (2).
Other field data as follows:
- Stock Days to Forecast – this will allow you to mass update the Days Sales field (12)
Sales – this is the unit sales for the dates selected in section (1).
- Daily Sales – this is the average sales per day.
- Adjusted Daily Sales – this is the overriding daily sales to calculate the Min and Max levels.
- Sales Last 7 days – sales on the previous 7 days from the system date.
- Order lead time – Order delivery Lead Time in Days per the Inventory Masterfile.
- Safety Factor – This is the excess safety Stock Factor per the Inventory Masterfile.
- Old Min Level – Previous Minimum Level.
- New Min Level – New Minimum Inventory Level that will be updated to the Masterfile on Saving.
- Days Sales – This is the number of days Sales to Stock.
- Old Max Qty – Previous Maximum Quantity.
- New Max Qty – New Maximum Quantity that will be updated to the Masterfile on saving.)
Processing Vendor Orders
The processing of Vendor orders can be made in one of, or using a combination of the following 3 ways:
Inventory Reorder Report
The standard reorder report has been extended to include the new Minimum and Maximum Levels, Economic Order Quantity and the Minimum Order Quantity. The reorder report has the ability to group order items by Preferred Vendor facilitating the reorder process.
Quick Order Form
Regarded as one of Palladium’s best-kept secrets, the Quick Order Form has all the functionality of the Inventory Reorder Report and more and allows you to select the items for reorder within a Vendor Purchase Order, allowing you to filter on only those items purchased from a specific Vendor.
Bulk Reorder Form
This is a new feature that allows you to load all items for reorder (per location) and create mass Purchase Orders from one screen. Note that this feature is only applicable where reordering is done at a per Inventory Location (Store) level. Below is an example of the Inventory Reorder Form. Once complete you will select the Generate Purchase Order.
Download the Support Article PDF