Skip to main content

Pre-Paid Hops Contract

Brewery/producer accounting steps for recording a pre-paid hops contract in Encompass as an asset with a non-inventory product, paying it down, and relieving it as hops are received. Requires v22.01+.

B
Written by Bailey Naas-Thornton

Minimum Version Required: 22.01

Steps

  1. Create a new product called Hop Contract Pre-paid

  2. Map that product to a non-inventory product type

  3. Map that product to an Other Asset account using Expense Account Maps

  4. Create an inventory-type purchase for the full value of the remaining value on the hop contract (Add product from step 1 at quantity of 1 and FOB = contract value)

  5. Confirm purchase (this establishes vendor liability and hop contract asset)

  6. As payments need to get made, create a check run for only the amount as agreed to in the payment plan

  7. When more inventory is needed, create an inventory-type purchase, add the products you need per usual purchasing process

  8. Once received by warehouse, AP team adds the non-inventory product from Step 1 (quantity of 1 and FOB = purchase total) and confirms the purchase. This will relieve the Hop Contract Asset account, increase the actual Hop inventory account and prevent further AP accrual.

Did this answer your question?