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Overview

NorthScope allows users to enter basic accounts payable credit memos that integrate as payable transactions within the host system. These transactions are used to record credits the user is receiving against a vendor. This transaction does not use inventory items, or integrate with NorthScope’s Inventory module. Credit memos can be recorded in either NorthScope or the host system. However, a NorthScope credit memo provides additional capabilities, such as recording line item details and allocations against financial projects, fishermen, and tenders.

Software Version

This guide is applicable for NorthScope version 2.8.3 and newer.

Prerequisites

Required Prerequisites

Before entering a credit memo transaction, users must complete the following:

  • Vendor Setup
  • Financial Account setup

Optional Prerequisites

The following prerequisites are not required, but users are encouraged to set them up:

  • Projects. Set up projects if licensed for Project Accounting to track expenses against.
  • Set the purchasing preference for “Default Account – Settlement Accrual”. This will ensure that transactions will still post if the settlement account has not been manually configured for each fisherman, tender, or employee.
  • Set the purchasing preference for “Enable Real Time Integration” to “Yes”. This user guide assumes the preference is set to “Yes”. If the preference is set to “No”, then the integration components described in Steps 3 and 4 will not occur.

Understanding the data flow

There are 4 types of Credit Memos that can be entered in NorthScope:

Traditional

A traditional credit memo occurs when the user is entering a credit from a vendor and none of the line items are being distributed (the “Distributed To” field is not assigned). When the transaction status is changed to “Ready to Post,” a Payables Transaction Entry is created in the host system’s Purchasing module.

Each of these transactions contain the journal details for a typical credit transaction with the debit account defaulting from the Vendor's “Accounts Payable” account and the credit account(s) coming from the line item "Purchase Account". 

To view the data flow of traditional Credit Memo transactions, click here.

With Project Distribution(s)

A credit memo with Project Distributions occurs when the user is entering a credit from a vendor and one or more of the line items is being distributed to a Financial Project. When the transaction status is changed to “Ready to Post” a Payables Transaction Entry is created in the host system’s Purchasing module.

Each of these transactions contains the journal details for a typical credit transaction with the debit account defaulting from the vendor’s “Accounts Payable” account and the credit accounts(s) coming from the line item "Purchase Account". 

In addition, each line item that was distributed to a Financial Project will create a detail transaction in the Financial Project to update the project's balance via a Purchasing Credit Memo line item.

This type of transaction requires the Financial Project feature to be licensed.

To view the data flow of Credit Memo transactions with Project Distributions, click here.

With Fisherman or Tender Distribution(s)

A credit memo with Fisherman or Tender Distributions occurs when the user is entering a credit from a vendor and one or more of the line items is being distributed to a fisherman or tender. When the transaction status is changed to “Ready to Post” a Payables Transaction Entry is created in the host system’s Purchasing module.

Each of these transactions contain the journal details for a typical credit transaction with the debit account defaulting from the Vendor's “Accounts Payable” account and the credit account(s) coming from the line item "Purchase Account", which will default from the fisherman's "Settlement Accrual" account.

In addition, each line item that was distributed to a fisherman or tender will create a corresponding settlement transaction in NorthScope, owing the fisherman or tender. 

This type of transaction requires the Seafood Purchasing feature to be licensed.

To view the data flow of Credit Memo transactions with fishermen or tender distributions, click here.

Step 1: Entering the Transaction in NorthScope

Entering a new transaction

From NorthScope, expand the Purchasing module on the navigation menu and select “Invoices”. This will open the Purchasing Invoices List View, which displays all purchasing invoices and credit memos with a status of New, Approved, or Ready to Post.

Click the “New” icon in the header toolbar and select “Credit Memo” to open a blank record view.

Completing the header fields

  • Amount: This is a calculated field that is updated on save. This is not editable.
  • Doc Date: Enter the date of the credit memo. The date defaults to the current date but can be edited. This field is required.
  • Doc No:  Enter the transaction number. This field is required and must be unique by Invoice/Credit Memo and vendor combination - meaning that no two credit memos and/or invoices for the same Vendor may have the same Doc No. 
  • GL Date: This field defaults to today's date but can be edited for the user to enter the date the credit memo will post to the general ledger.
  • Payment Terms: This field defaults to 'Use Vendor Default'. Once the transaction is saved, this field will update to display the vendor's default payment terms, however, this field is never editable. 
  • PO: Enter the purchase order used to place the order. This field is not required.
  • Status: This field is to select the status from the following options:
    • New - This is the default.
    • Approved - Used when there is a two-step process for finalizing transactions. Setting the status to “Approved” disables all editable fields except Status.
    • Ready to Post - Used when the user is ready to post the transaction. Setting the status to “Ready to Post” disables all editable fields including status
  • Vendor: Select the vendor for the transaction. This list contains all active vendors assigned a “Vendor Type” of Vendor. In order to process a credit transaction for a vendor with a “Vendor Type” of fisherman or tender, the user must use the Adjustment Transaction. This field is required.

Adding line items

By default, new transactions open with 5 blank rows for data entry. Complete the data entry for each line item the user wishes to add. 

Required line item fields:

  • Description: Enter the description of the line item (e.g. Office Supplies or Rent). This field defaults once the item has been selected. 
  • Extended: This field is read-only and displays the product of the price per UOM and the quantity. 
  • Price: Enter the price for the line item. Prices must be greater than or equal to 0.
  • Purchase Account: Enter the expense account that will be used for the credit side of the journal entry (for an invoice, this would be a Debit Account). The lookup contains all the active financial accounts that are marked as “Use in Purchasing”. This field is blank by default, but is required in order to save the line item. If the line is distributed to an employee, this field will default to the Employee Accounts Receivable Account and will become disabled. If the line is distributed to a Fisherman, Tender, or Fisherman & Tender, this field will default to the AP Vendor's Settlement Accrual Account and will become disabled.
  • Quantity: Enter the amount of the line item. This field defaults to 1 and must be greater than 0.

Optional line item field(s):

  • Distributed To: If the line item is being distributed, use this lookup to select the project, fisherman, or tender. The lookup contains a list of all active projects and all active vendors with a “Vendor Type” of Fisherman, Tender, or Fisherman/Tender.

Step 2: Finalizing the Transaction in NorthScope

Changes can be made to a transaction until it is finalized. To finalize a transaction, the user will need to change the status to “Ready to Post”. In some companies, posting is a two-step process where the transaction(s) are approved by one person, and posted by another.

Approving the transaction

This step is optional and is used for companies that require a two-step process where the person who approves the transaction cannot be the same person that posts the transaction.

To approve a transaction, open it from the list view, change the status to “Approved”, and click the “Save” icon on the header toolbar. In addition to the validations performed each time the “Save” icon is clicked, the following validations are also performed:

  • Ensure there is at least one valid line item on the transaction.
  • Ensure all the default GL Accounts can be assigned
    • The “Accounts Payable” account for the transaction vendor.
    • The “Settlement Accrual” account that defaults from the transaction vendors “Settlement Accrual” account or from the “Default Account – Settlement Accrual’ account in the Purchasing Preference.
  • Ensure the GL Date resides within a valid fiscal period as determined by the host system. 

If any of the GL Accounts cannot be assigned, a message will appear.

Once the status has been successfully updated to “Approved”, all editable fields, with the exception of Status, will be disabled.

Finalizing the transaction

When the transaction is ready to be finalized, open it and change the status to “Ready to Post” and save the transaction. Setting the transaction to “ready to Post” does the following: 

  • Validates the same conditions as the approval status
  • Locks down all editable fields, including Status
  • Creates an un-posted AP Credit Memo in the Host System 
  • Creates an Arrears Transaction Entry in the Host System (if one or more line items were distributed to an Employee)
  • Updates the NorthScope Financial Projects (if one or more line items were distributed to a Project)
  • Creates a transaction in the Settlement tables (if one or more line items were distributed to a Fisherman/Tender)

Prior to this, the host system does not know about the transaction.

Step 3: Reviewing the transactions in the host system (optional)

If the purchasing preference for “Enable Real Time Integration” is set to “Yes”, every credit memo changed to “Ready to Post” will be created in the host system. The journal entry will appear in the host system's Financial module as a Transaction Entry in the batch titled NS followed by the year, month, and day with the following format: NS: YY_MM_DD. For example, if the Credit Memo was integrated on July 14, 2015, the Batch ID for the transaction entry would be NS: 15_07_14. Once a transaction has been integrated in the host system, it can be reviewed prior to posting. Because posting in the host system makes all the updates to the general ledger, the GL Distributions should be reviewed. This can be done by opening the transaction and clicking the “Distributions” icon in the lower right corner. 

Every credit memo will contain one or two types of journal entry details.

Reviewing journal details to record the credit from the vendor

Every credit memo integrated to the host system will contain the following journal entry lines:

  • One debit line for the total of the entire credit memo. The debit account will be the vendor’s “Accounts Payable” account. The distribution Type will be “PAY”.
  • One credit line showing the summarized total for each “Purchase Account” identified on the NorthScope transaction. The distribution Type will be “PURCH”.

Reviewing journal details to record the accrued liability for line items that were distributed to fishermen and tenders

Every NorthScope credit memo that contained at least one line item distributed to a fisherman, tender or fisherman & tender will make a journal entry to record the accrual with the following distributions: 

  • One debit line for the total of the entire credit memo. The debit account will be the vendor’s “Accounts Payable” account. The distribution Type will be “PAY”.
  • One credit line showing the summarized total for each “Purchase Account” identified on the NorthScope transaction, which will default from the distributed to fisherman's or tender's “Settlement Accrual” account or, if missing, defaults from the purchasing preference for “Default Account – Settlement Accrual” account. The distribution Type will be “PURCH”. 

Step 4: Posting in the host system

Once the user is satisfied that all the GL Distributions are correct, the user can post the batch in the host system.

Posting the batch accomplishes the following:

  • Posts the transaction within the Purchasing Module of the host system
  • Updates the General Ledger of the host system
  • Updates the Transaction Status in NorthScope from “Ready to Post” to “Posted”.

Note: Although this step is required, it does not need to be done for each transaction. Posting can be done nightly or as needed.

Step 5: Reviewing in NorthScope

Once Step 4 is complete and the transactions have been posted in the host system, the following events will happen in NorthScope:

For transactions that did not contain any line items with distributions 

The transactions that were posted in the host system will have their status automatically updated from “Ready to Post” to “Posted” and will no longer be visible in the NorthScope Purchasing Transaction List View.

For transactions that contained at least one line item distributed to a project

The transactions that were posted in the host system will have their status automatically updated from “Ready to Post” to “Posted” and will no longer be visible in the NorthScope Purchasing Transaction List View.

The “Actual Expense” value of each Project will be updated to include the details from each transaction line item that was distributed to a project, decreasing the expense by the distributed amount.

For transactions that contained at least one line item distributed to a fisherman or tender

Each transaction that was posted will have its status automatically updated from “Ready to Post” to “Posted” and will no longer be visible in the NorthScope Purchasing Transaction List View.

Settlement Transactions will be added for each fisherman and tender that was distributed to, owing the fisherman and/or tender the distributed amount.

 

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