It happens that your suppliers make mistakes with invoices – wrong prices, wrong shipments etc. It happens with everyone and obviously; the less it happens, the better for everyone, but when it does, what should your accounting treatment be?

However you see it, regardless of any penalties and such which you may have agreed with your suppliers, that are to be charged for such situations, there’s a general way of treating account payables when such situations arise.  Continue reading →

Bonuses you receive are those suppliers pay to you. They may be calculated on various bases, mostly volume, but also from sales of specific products, with determined prices etc. They also may be paid monthly, quarterly or even annually.  Continue reading →

Every now and then it happens that your suppliers make mistakes. They send out wrong invoices for completely wrong goods, right goods but wrong prices etc. Be the reasons what they are, you need to account for the invoice regardless.

Unless your supplier sends the credit invoice right away, at first you’re stuck with the wrong invoice and if you want to start selling the goods or using them at least, you need to account for them.  Continue reading →

A purchase order or a “PO” in short stands for a process before the purchase transaction itself. It is one thing to make a purchase, but thinking a few steps before the act itself is what the PO is about.

A purchase order is either a procedure in place in your business (or one you can implement) or it’s at least an idea of what you may want to consider before making the transaction. It includes:  Continue reading →

Making a purchase is a process, a flow of activities that need to be done in order to have an accurate transaction in your accounts, all relationships in good shape and the transaction taking place also in reality.

When first making a purchase, depending on the size or procedures in place in your business, there should be something called a purchase order that needs to be considered. In this sense I mean “considered” as implemented or at least the idea and what it imposes should be considered when making the purchase.  Continue reading →

Account payables are your liabilities you have against your suppliers. As it is apparent from the name, on the balance sheet account payables are shown under liabilities, on the opposite side of your assets.

Generally speaking, an account payable can occur when you’re either buying assets, goods or services. It doesn’t really matter if the goods bought are to be resold or used in your own business (i.e. if they are to be included within your inventory until they are sold or if they are to be expensed right away).  Continue reading →

In essence a payable is an obligation or a liability you’ve got against another party. This “party” can be your supplier, your employee, regulators, owners and so on.  Continue reading →