From purchase order to a depreciating fixed asset
A buyer raises a requisition, an approver signs it and it becomes a purchase order. The receipt posts the accrual, the invoice is matched to the PO and the receipt, and the equipment becomes a fixed asset with depreciation running on your books.
Purchasing / PO-55131
PO-55131 · Atlas Industrial
Air compressor for Plant 2 · Buyer R. Ortiz
- PO total
- $48,600.00
- Received
- 1 of 1
- Invoiced
- $48,600.00
- Match
- Within tolerance
| Step | Document | Who | Date | Amount |
|---|---|---|---|---|
| Requisition | REQ-10418 | D. Brooks | Sep 2 | $48,600.00 |
| Approval | REQ-10418 | L. Nguyen | Sep 3 | $48,600.00 |
| Purchase order | PO-55131 | R. Ortiz | Sep 3 | $48,600.00 |
| Receipt and accrual | GR-30944 | S. Kim | Sep 19 | $48,600.00 |
| Invoice matched | INV-88213 | L. Nguyen | Sep 22 | $48,600.00 |
| Asset created | AC-02 | L. Nguyen | Sep 22 | $48,600.00 |
Depreciation starts
- AC-02 placed in service Sep 22 · straight line · 10 years.
- First monthly charge of $405.00 posts with the September run.
Step by step
- 01
Someone in the plant raises a requisition
D. Brooks requests a replacement air compressor for Plant 2 against an approved vendor. The requisition carries the item, the quantity, the need-by date and the account it will charge.
Purchase requisitionsRequisitions for non-catalog itemsApproved vendor list per item
- 02
The right person approves it
The requisition routes to an approver by amount, and the person who raised it cannot approve it. L. Nguyen approves, and the decision is recorded with the time and the reason.
Amount-based approval workflowsSeparation of duties on approvalsPending approvals queue
- 03
The approved lines become a purchase order
R. Ortiz turns the approved requisition into PO-55131 to Atlas Industrial without retyping a line. The PO checks the GL account before it is released to the vendor.
Convert approved requisitions to POsPurchase order creation and editingGL account limits on PO lines
- 04
The receipt posts the accrual
S. Kim books the compressor against the open PO line at the dock. The receipt posts and books the accrual, so the liability is on the ledger before the invoice arrives.
Receive against PO linesReceiving inspectionAutomatic receipt posting
- 05
The invoice is matched three ways
The vendor invoice is compared with the PO price and the quantity received. It falls inside tolerance, so it is approved and posted without anyone reconciling it by hand.
Invoice entry against POsThree-way invoice matchTolerance-based match and cost exceptionsInvoice approval posting with price variance
- 06
The asset is created and depreciation starts
AC-02 is added to the register at its received cost with its location, category and book policy. Depreciation begins with the next run, and the asset page links back to the PO, the receipt and the invoice.
Searchable asset registerPer-asset, per-book method, life and conventionMonthly depreciation runTrace any number to its source
Related
Common questions
When does the accrual post?
When the goods are received. The receipt posts and books the GR/IR accrual, which the matched invoice clears.
What happens when the invoice does not match the PO?
Differences in price, quantity or date are checked against your tolerances. Anything outside them goes to an exception queue with the reason, and the invoice waits there until someone resolves it.
Can the purchase go to a capital project instead of straight to an asset?
Yes. A PO line can carry a capital project and its AFE number. The receipt then debits CIP, and the project is capitalized into an asset when it is complete.
Can I trace an asset back to its purchase order?
Yes. The asset page and the trace screen walk from the asset to the receipt, the invoice and the PO, and to every journal entry along the way.
The plant never stops. Neither does the record.
Bring an asset list and a month of work orders. We will load them and walk through your own plant in VenturusEAM, from the purchase order to the depreciation run.