About support for expense reclassification

The Expense reclassification functionality must be enabled in the system before you can use it.
You can check whether the functionality is enabled in your system by using the Enable/disable functionalities (CS100000) window.

If the functionality is enabled, you can specify the account and subaccount to be used to temporarily record non-classified expenses for each existing supplier in the Suppliers (AP303000) window.
To facilitate assigning such accounts to new suppliers, you can select the default account and subaccount for expenses pending reclassification for each supplier class on the General ledger accounts tab of the Supplier classes (AP201000) window.
Once you do this, each new supplier assigned to the class will have the reassignment account and subaccount specified for the class.

If, for any reason, your organisation decides to disable the Expense reclassification functionality, you should first perform expense reclassification for all documents with the Pre-released status and then release them.

Pending expense reclassification is allowed invoices entered manually in the Supplier ledger workspace.
Pending expense reclassification is not supported for invoices based on purchase receipts or the lines of purchase orders, or for invoices automatically generated in the Purchases workspace.

Once the Expense reclassification functionality has been configured, your company can use one of the following scenarios:

• Standard scenario:
  If the data entry worker who enters an invoice knows the correct expense accounts and subaccounts for the document, this user enters the document and releases it.
• Two-step scenario:
  If, when entering an invoice, the data entry worker is not sure which expense accounts to select, this user does not change any of the expense accounts and subaccounts that appear as the default accounts and subaccounts on the document lines; the user pre-releases the document by clicking Pre-release in the window toolbar.
  Later, the document will be reviewed by an authorised accountant who will assign the correct expense account and subaccount to each line and release the document.

For the two-step scenario, the system generates two batches of transactions.
During the first step of the scenario, once the invoice has been pre-released, the system generates the Pre-releasing batch (the reference number of this batch is shown on the Financial details tab of the Purchase invoices (AP301000) window), which includes the following transactions.

Account	Debit	Credit
Supplier ledger	0.0	Amount
Reclassification account	Amount	0.0

Although the expenses related to a invoice are actually recorded to the reclassification account (as shown by the pre-releasing batch), notice that the document lines keep the default expense accounts and subaccounts that were associated with the supplier specified in the document summary or the stock item specified on the line.

During the second step of the scenario, once the reclassification account is replaced by specific expense accounts, the system generates the following transactions.

Account	Debit	Credit
Specific expense account	Amount	0.0
Reclassification account	0.0	Amount

Depending on the policies established in your organisation, you can configure the system so that users with a data entry role will not be able to release the entered documents and instead must pre-release them.

An authorised accountant can reclassify the expenses for each document pending reclassification by using the Purchase invoices (AP301000) window for each invoice.
In either window, the accountant selects each document with the Pre-released status, reviews it, and assigns a specific expense account and subaccount to each document line, according to the classification of expenses used in your organisation. For each line, the accountant can leave the expense accounts and subaccounts that appeared by default, if they are correct, or replace them with the correct ones and release the document.

For a document with the Pre-released status, only the branch, expense account, and expense subaccount may be changed.
The document totals and VAT amounts cannot be changed.

If approval of invoices for payment is required in your system, the pre-released invoices also require approval before they can be paid.
The invoices with the Pre-released status can be paid at any time before or after their final release.

The Pre-released invoices appear on supplier ledger reports and inquiries as Pre-released documents.
Also, by using the Purchase invoices (AP301000) window, the users can view the Pre-released invoices.

A invoice with the Pre-released status can be voided if no payment has been applied to the invoice.
If a payment has been created for a pre-released invoice that you want to void, first void the payment and then void the invoice.