ISTech Support Forum

ISTech Support Forum
http://www.istechforum.com/YaBB.pl
Evo-ERP and DBA Classic >> Sales >> Posting Invoices
http://www.istechforum.com/YaBB.pl?num=1088699018

Message started by Carla on 07/01/04 at 08:23:38

Title: Posting Invoices
Post by Carla on 07/01/04 at 08:23:38

We invoice our customers on large jobs, 1/3 down with purchase order, then after shipment we invoice them the balance. I use AR -N to make the deposit when I receive the 1/3 down and also when I receive the balance. I have been posting the invoice when I receive and deposit (in AR-N) the final check (using the date that I invoiced the customer for the final payment for my posting date).

Our CEO wants the Sales to be the invoiced $$ amount and show up on the Income Statement for the month it occurred in, but I can't post the 1/3 down invoice when invoiced, because then I cannot deposit the balance due to the fact that the Sales Order has already been closed and posted (from 1/3 down invoice). Therefore only the total Sales $$ are showing up on the income statement in the month of the FINAL invoice (which is not what he wants). We can't use two separate Sales Order numbers because then the deposit won't show up on the final invoice and it would also confuse Engineering, Manufacturing and Sales (and they are confused enough already ;) )

Or am I doing something backwards? Any ideas would be appreciated!

Thanks.

Title: Re: Posting Invoices
Post by cathyh on 07/01/04 at 11:13:06

A deposit or prepayment is normally considered a liability, not income, until the product being sold is actually shipped. I suppose you could create a part number for a prepayment or whatever you want to call it and put it on the sales order with the part you are selling, then release and invoice the prepayment part number when the deposit is received. This would mean your price for the part you are selling would be reduced by the prepayment amount and your profit margin might look really bad!

Title: Re: Posting Invoices
Post by Karen Mason on 07/01/04 at 13:29:42

...or you could do a journal entry to record the sale then reverse it when the final sale is made. However, you should also put a portion of the costs into cogs at the same time, otherwise it is an overstated sale amount. Slip a copy of the GJ entry into your "closing" folder and move it month to month until the sale is made and the reversal is processed.

Title: Re: Posting Invoices
Post by Carla on 07/01/04 at 14:12:23

Thanks all for the assistance! I will try these solutions!

Title: Re: Posting Invoices
Post by aricon on 07/01/04 at 19:47:32

However, GAAP states that what your CEO wants is not proper. In accrual accounting, the way that you have been doing it is the proper way. To do it the way that he wants is contrary to GAAP and therefore is overstating your income statement for the month in which you only receive the deposit. And with Sarbanes-Oxley as a reality you may want to suggest that he re-think his position. SERIOUSLY.

Title: Re: Posting Invoices
Post by lmk223a on 07/02/04 at 06:00:42

Another suggestion, is to apply the customer's payment of 1/3 down to the Customer Code as a credit balance on account, rather than as a Customer Deposit to a sales order. Invoice the customer for the 1/3 down payment and/or whatever has shipped (as title usually passes when the product ships and this is okay with GAAP) and apply the customer's credit on account and any payments to the invoice(S) through A/R-C.

Any thoughts??

Title: Re: Posting Invoices
Post by Carla on 08/20/04 at 05:56:22

Thanks all for the info! :D (sorry for the delay in responding - have been traveling since the beginning of July!)