It is just the same move but inverting debit and credit and set at the date of the next period.
So there is nothing special to do when the invoice is posted.
This is not how is handled in Spain. Following the example already posted:
We should on create the following moves:
- When closing the period:
- Debit Expense - Credit invoices pending to receive
- When receiving the invoice:
- Debit invoices pending to receive - Credit Payable
Creating the reverse move just after the move will produce wrong balance and Income Statement because:
- The payable of the received goods won’t appear on the balances for the rest of the period but the liability had been already reconized.
- The expenses of the period will be reduced just to compensate an expense that has been already accounted for the previous period.
Sorry but this is the best way to screw the all process.
I do not care about what say a random website.
This is the best way to get a messy accounting.
What happen if you “forget” to link the invoice to the pending move?
How do you manage multiple reception on different periods with a single invoice?
It can not be wrong because it is a null operation.
The only goal of such operation is to differ artificially the accounting.
Exactly there is no liability if there is no invoice.
Exactly there has been no expense yet without an invoice.
There is a liability due to the fact that you already received the goods (so you must pay for it) but there is no payable amount because you did not receive the invoice yet. I think this is called accrued expenses
You must not. That’s why I was talking about automatically using the pending invoice accoun when posting the invoice or add some option to allow the user to “recall the liablity”
The pending invoice account is credited on each reception and the same account is debited when the invoice is received. There is nof diference if there are multiple receptions or multiple invoices or even a single one of both.
If the result of the operation is null it does not make sense to make it. Better do nothing.
No, the goal is to account in the balance sheet that some smount should be paid because some goods have been received but they can not be paid i?because the invoice had been received yet.
Wrong, the liability appears when you receive the goods or the services.
I do not agree. For example when you have received the goods and you use them to manufacture a product the expense is produced when the good is consumed, no mather if the invoices has been received or not.
Just to clarify: All your points are perfectly valid for Small and Medium Enterprises because the usually have a simplified version of accounting and they do not account such pending invoices (mostly because they do always receive the invoiced on time or the amounts are not so big). But this is not true for bigger companies because they may receive bigger orders which are only invoiced when fully sent but delivered in several shipments and completing the full process may last some months. Also on bigger companies the size of the orders are bigger and not accouting such moves causes more effect on the balance, and this may raise some issues for the auditors of the statements (which even do not exist for SME)
This makes me think that this statement:
Won’t be valid when invoicing when the shipment is fully sent. Which is not currently implemented on Tryton but it may be on the future.
That’s false because the price could be different, the quantity also.
It is null globally but at the period/fiscal year level it is not null.
I have nothing else to add. I know that my proposal is the right way to manage correctly and safely this.
And what is the problem? If there is a change on the price or the quantity (which should very rare because we only account what is already sent) the diference should be accounted to the expenses or revenue of the company. For me there is no issue to force the accountant do it manually.
Indeed there are other of cases where and expense is estimated before it happens (for example when the company received a law suit) and then adjusted when they relly happend.
I seen there are some countries that go this way, specially for diferent fiscalyears, but this is not the only way.