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Use of purchase order to obligate funds in nonprofit (Desktop)
We've been told by a grantor to enter a PO so we can bill them for reimbursement of a purchase. I know that purchase orders don't hit the books until they are received and that normally you would just enter a bill or accrue it, but I wonder if you could tweak the the items to force an entry into the income statement. The reason I'm asking is that they specifically said to use a purchase order to encumber the funds. Any ideas?
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Other questions
You are correct that purchase orders are non posting - so entering a purchase order will not affect any general ledger accounts. If the item is received and posted to accounts payable as a billable expense that will allow you to invoice the donor, notice I said allow. I don't know of any way to automatically bill the donor for a billable expense.
If this solves your problem please mark as solved.