In a simply answer if these purchase not related to any stock or inventory then you can record it in Accounts payable ( AP ) if you have balance with the supplier Or on cash basis if you just buy and pay it then on the direct expense from the cash BUT if its related to inventory then they are2 ways and no third as below :-1) receive the item on accrual base from the inventory in order to make your stock feel the quantity from the inventory Module then you make post only and only from the module and not GL , then you delete the effect of these transaction from GL ,finally when you receive the supported documents from the supplier you can make entry from the Payable on the same accrual by that you will make decrease of that accrual every time you receive the document and it should be Zero once all invoices received from the supplier as first you increase the accrual by inventory receiving then decease it by the invoice entry from AP on same accrual to be the effect ZERO. ( But these way is applicable and more used than the second in order if you need to make any Sales Order an go through the supply chain cycle and invoices the customer to make your revenue quickly , must the item be in your stock and not waiting for suppliers invoices ( Local or Overseas ) but you must always follow up for that accrual and make analysis for it.2) DONT receive any items in your stock unless you have the supplier invoices ( Local Or Overseas ) but only make receive for the items in inventory and don't post unless you make receiving with invoices to close the whole cycle ( But these way applicable when the company make monthly closing and no need for any PO to be issue to any customers and they make that hand write then enter that by the end of month.
by
serbah djamel , Senior Specialist General ledger/ Financial control , wataniya telecom algeria
source of answer :
"Perpetual Inventory System & Periodic Inventory System
Definition: Perpetual Inventory system is in practise in ERP Environments and periodic
inventory system is followed mostly in legacy applications where there is NO Integration
between Inventory and Accounts.
What it is: Under perpetual Inventory system the stock is accounted as an asset and any addition or issues is reduced from the asset account.
Under Periodic Inventory system the the opening stock is accounted as an asset and Purchases are accounted as Expense and at Year end closing stock is arrived based on physical count and taken as as asset.
When it is set: Perpetual Inventory system is in use only in computersied and ERP Systems
Periodic Inventory system is used in manual and Legacy systems(Before evolution of ERP Concept)
Where it is set: It is by Default available in Inventory Module in any ERP.
Whom it is set: By default in ERP environment, (in SAP or Oracle or any other ERP) it works with Perpetual Inventory system
Why it is: Perpetual Inventory system establishes better control over inventory and reduces the manual effort of doing Physical count and maintaining updated balances.
How it is used: With perpetual Inventory system your on hand inventory is dynamic and updated as soon as receipt and issues are accounted and prevents passing entries in back dated transaction
This way it establishes better inventory control
Note: The biggest problem with Perpetual Inventory system is you cannot check the inventory on a particular date as it keep on dynamically changes the values.
Ex: If you would like to know the stock15 days before, the values would have got overwritten and getting the stock position as on that date is a problem provided if you run the reports on daily basis and store them in advance.
You can find more information and accounting for periodic and perpetual accounting system in the following URL
Hope this helps
