The Agresso Logistics Purchase Order Processing (POP) module requires products to belong to a product group. This product group determines where the costs appear in the General Ledger as it has a one to one relationship to a GL account. Thus it is the type of thing that you are buying that determines the accounting treatment.

This can be an issue for organisations which also use the Agresso Project Costing and Billing (PCB) module. If an organisation is project based it is usually the type of project that is incurring the costs that determines the accounting treatment. eg If the purchase will be subsequently sold on to a customer, the costs should appear as an asset on the balance sheet ie work in progress - however, if the purchase is for internal use only it should appear as a cost in the P&L.

The traditional solutions suggested are :-

• Have two different products linked to two different product groups, one of which posts to the balance sheet, the other posting to the P&L.

• Have one product linked to a product group which posts to either the balance sheet or the P&L and have the GL account assigned to the purchase order changed where necessary on each individual purchase order.

Both of these solutions rely on the person placing the purchase order knowing the intended accounting treatment. A lot of project managers know exactly what is required on a project but have no desire to be accountants. It is very likely that mistakes will be made in assigning the GL account.

There is a another solution, using Agresso standard functionality that takes the decision on accounting treatment out of the hands of the purchaser and into the hands of the accountant using machine logic to prevent mistakes. To find out more about this and other innovative solutions to operational issues, contact Empiria.