I’m facing a strange problem here. We have some minor expenses, and we allow our buyers to pay these small expenses with a specific down payment for that purpose (This action can be registered as a type of loan?)
So, I had an open material request, which was bought with money from that down payment.
How do I proceed with the registration of this purchase in the system?
Should I make a Expense Claim? Will this Expense Claim be associated with that material request?
Should I close the material request?
I am in doubt as to how to process this purchase, associated with the requisition of material and the refund itself.
Terminology clarification here:
An Expense claim is a document submitted by an employee where they have incurred an expense on behalf of the company and want to be reimbursed. For example, I bought supplies for the quarterly company party and want the company to pay for it. It’s not unreasonable that a Material Request was submitted for this (I bought supplies at the request of multiple people in the company, chocolate, vanilla and strawberry ice cream) but if it’s under a certain threshold that’s not that realistic… it would have to be a lot of ice cream. Furthermore, Material Request cannot fetch items from a Expense Claim, and it probably shouldn’t.
I would propose that you experiment with the following to see if it is a good workflow for you.
Create a payable account that has a debit balance (this could also be called a contra-liability account or “an asset account disguised as a liability account”).
Make an opening journal entry to each employee as the party:
Confirm that this is all as you desire in the general ledger credits-and-debits-wise. To be clear, STEP 4 IS THE MOST IMPORTANT STEP. And you should probably discuss all of this with your internal finance person (CFO/ Bookkeeper/ Controller), because everyone will be confused until they talk through it, maybe twice. That’s OK because what you’re doing is as you say, “a strange problem”.
This follows your “some kind of loan” direction of thought. Personally, I think you should avoid Material Requests in this context but continue to use them in the normal buying or manufacturing work flow.
In this example, 2 of the 5 items of this material order were purchased to play this loan in advance, because it is exactly what this loan is meant to be (to buy cheap things faster …).
Items 1,2 and 5 were purchased, play an RFQ, and, after the whole process, will be done, with a green bullet …
Consider that I bought items 3 and 4 with the loan, I do not know what to do …
I believe there are two options:
Cancel, change this material order, excluding these two items
Create a vendor type to record this movement by pretending the complete movement.
but, also, I understand the accounting issue x the record issue… If I register the item in the accounts as part of a reimbursement, I can’t finish the register of the item, and… cannot control the use, movements, etc…
If I create an supplier, and finish the material request process, the cost will be recorded twice, because I have to deal with the reimbursement.