Recording an Invoice Not Received

Recording invoices not received (INR) offsets the impact of the timing gap between when a service is performed, when the invoice is issued, and when it is recorded in the books.

This article covers the following topics:

• The purpose of Invoices Not Received in accounting
• Recording an INR at closing
• Marking the invoice as received

The purpose of Invoices Not Received in accounting

Overview

Journal entries related to INRs are recorded at closing (referred to as period-end adjustments) or during interim accounting reviews.

This applies when goods have been received or a service has been performed, but the organization does not yet have the corresponding invoice at the time of closing.

Example: your accounting period ends on 12/31. On 12/20, you receive goods, but the invoice doesn't arrive until 01/05. In this case, you should record an INR as of 12/31.

Related journal entries

When you record an INR, a first entry is generated at closing:

Once the invoice is received in the following accounting period, an expenditure entry can be recorded. It will offset the reversing entry in the class 6 account:

Finally, a reversing entry must be recorded on the first day of the new accounting period:

Once all entries have been posted, the expense is properly matched to the correct accounting period (Year N) and offset in the period when the invoice is received (Year N+1).

Recording an INR at closing

In the software, INRs are recorded at closing from the Accounting > Closing page.

If you are importing an opening balance from a prior accounting history that includes an unsettled INR, you can enter it as an Opening Balance using the Other (journal book entry) option.

To record your INR at closing, open the section of the same name from the pre-closing verification page:

Then click "New" to record your INR.

Enter the description, the class 6 account, and the relevant bank account.

Add as many invoices not received as needed, then click Save.

Marking the invoice as received

Once the invoice is received in the following accounting period, go to Accounting > Book Entry > INR & Provisions.

Select the relevant entry from the list displayed at the bottom of the page:

Enter the date the invoice was received (or the cancellation date) and save:

This will generate a reversing entry on the first day of the current accounting period. You can however edit the entry date if needed: find the entry (using the Search module or the General Ledger, for example), click on it, then click Edit. Update the date before saving:

Don't forget to record the corresponding expenditure entry using the expenditure/revenue entry feature.