It happens that your suppliers make mistakes with invoices \u2013 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?<\/p>\n
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\u2019s a general way of treating account payables when such situations arise.\u00a0<\/p>\n
First and foremost is making sure your payables balance is accurate as soon as possible \u2013 that means you need to account for the right invoice. The other side of the entry is either an expense account or inventory balance \u2013 they also need to be accurate so it\u2019s important to agree on the right invoice (and also get it).<\/p>\n
Say that you\u2019ve initially accounted for the wrong invoice because you need the goods to be used or sold and the payable itself is under dispute. When the right invoice arrives, your accounting entry should be correcting the wrong balance \u2013 either taking it fully out from the accounting or merely changing the balances so they meet the ones on the new invoice.<\/p>\n
One word of advice is that you should always account for goods in the right amount and right price. You\u2019re going to use them in either your sales or production and as such, they may be used up already once the right invoice arrives. Obviously, if there\u2019s no previously agreed pricelists you have no way of knowing the correct price and as such, it\u2019s riskier and more complicated to start using those goods, but anyway, if you decide to use them, make sure their price is as accurate as possible.<\/p>\n","protected":false},"excerpt":{"rendered":"
It happens that your suppliers make mistakes with invoices \u2013 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 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,80],"tags":[],"class_list":["post-4584","post","type-post","status-publish","format-standard","hentry","category-2-processes","category-2-10-purchases-and-payables"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4584","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4584"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4584\/revisions"}],"predecessor-version":[{"id":4585,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4584\/revisions\/4585"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4584"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4584"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}