Instructions on how to account for invoices before and after the goods including recognition principles, methods of accounting for invoices before and after the goods & specific examples
Invoices received before goods arrive later is one of the relatively special cases that accountants need to monitor and process data. In the article below, fdiinvietnam.com would like to present some cases where invoices have been received but goods have not yet arrived at the enterprise, the principles of recording, accounting methods, notes and some illustrative examples of accounting for invoices received before goods arrive later.
I. Legal basis
- Circular 133/2016/TT-BTC;
- Circular 200/2014/TT-BTC.
II. Cases where the invoice arrives first and the goods arrive later
In purchasing operations, goods usually arrive before invoices, however there are some cases where a business may receive an invoice but the goods have not arrived, such as:
- In case the enterprise has agreed to purchase the goods and accepted payment but the goods are in transit or temporarily stored at the seller’s warehouse, port, etc.;
- In case the goods have arrived at the enterprise but are waiting for inspection and acceptance into the warehouse.
For example:
When a business orders goods from a seller’s warehouse and has paid, the business will receive an electronic invoice immediately after handing over the goods to the seller’s warehouse. Meanwhile, the goods will be delivered later due to inter-provincial transportation.
III. How to account for invoices before goods arrive
1. Accounting accounts and accounting principles of first-come, first-served invoices
Goods that have been identified as belonging to the enterprise but have not been put into the warehouse during the month, upon receiving the seller’s invoice, the accountant shall track the goods in transit records and comply with the following principles:
- During the month, if the goods have been imported into the warehouse, based on the warehouse receipt and invoice, the accountant debits warehouse accounts 156 and 152;
- If the goods have not arrived by the end of the month, the accountant will record them in account 151 – Goods in transit, recording details for each type of goods, materials, and production batch according to the management needs of the business.
2. Method of accounting for invoices before goods arrive
2.1. Accounting when goods have not been entered into the warehouse
If at the end of the month the goods have not completed the warehouse entry procedure, based on the invoice received from the supplier, the accountant will make the following entries:
- Debit account 151 (account for goods in transit): Purchase price excluding VAT;
- Debit account 133 (deductible VAT account): VAT amount of purchased goods in transit;
- Credit account 111, 112, 331 (cash account, bank deposit, debt): Total payment value.
2.2. Accounting when goods arrive at warehouse
Based on the goods receipt slip or the completed warehouse acceptance process, when the goods have been imported into the warehouse, the accountant records as follows:
- Debit account 152, 156 (raw materials and goods account): Actual value of imported goods;
- Credit account 151 (account for goods in transit): Actual value of goods imported into warehouse.
2.3. Accounting for lost goods later
In case the goods are damaged or lost during transportation, the accountant needs to base on the delivery and receipt minutes and account for the value of the damaged or lost inventory as follows:
- Debit account 1381 (account pending settlement): Value of inventory that is damaged or lost and needs to find the cause for settlement;
- Debit account 632: Value of natural loss/within standard;
- Credit account 151 (goods in transit): Total value of damaged and lost goods.
>> See more: How to account for inventory.
2.4. Accounting for goods sold without going through the warehouse
In case the goods arrive later but are not stored in the warehouse but are transferred directly to the customer’s warehouse or port, sent for sale at an agent, or consigned, the accounting is as follows:
- Debit account 632, 157 (cost of goods sold account, goods on consignment): Value of purchased goods not in stock;
- Credit account 151 (account for purchased goods in transit): Value of purchased goods not in stock.
See also:
>> How to account for domestic purchases;
>> How to account for goods arriving first and invoices coming later.
3. Illustrative example of accounting for invoices before goods arrive
Example 1:
On November 15, 2023, Company A purchased goods from Company B with a total value of 68,000,000 VND, VAT of 6,800,000 VND, delivery terms at the seller’s warehouse. On November 15, 2023, Party B issued an invoice to Party A. As of November 30, 2023, the goods were still in transit and had not been entered into Company A’s warehouse. On December 17, 2023, the goods were counted and entered into the warehouse in full according to the invoice. Company A received the goods and then paid by bank transfer to Company B.
In this case, company A’s accountant will record the invoice as follows:
- On November 15, 2023, when receiving the invoice but the goods have not arrived at the warehouse, the accountant will separately track the purchase invoice of company B;
- From November 30, 2023 to the last day of the month, the goods have not yet arrived, the accountant proceeds to record the following entries:
- Debit account 151: 68,000,000 VND;
- Debit account 1331: 6,800,000 VND;
- Credit account 331: 74,800,000 VND.
- On December 17, 2023, when the goods are imported into the warehouse, the accountant will record:
- Debit account 156: 68,000,000 VND;
- Account 151: 68,000,000 VND.
- On December 18, 2023, when paying for goods, based on UNC, the accountant will record:
- Debit account 331: 74,800,000 VND;
- Account 112: 74,800,000 VND.
Example 2:
On December 31, 2022, Company C purchased 10 shirts online at a pre-VAT price of VND 123,000, VAT of VND 12,300 and paid by bank transfer to the seller immediately after completing the order. Company C received an electronic invoice via email on the same day, December 31, 2022, immediately after payment. However, the 10 shirts will be delivered 5 days after the order date.
In this case, company C’s accountant will account as follows:
- On December 31, 2022, when receiving the invoice but not receiving the goods, the accountant records:
- Debit account 151: 123,000 VND;
- Debit account 1331: 12,300 VND;
- Credit account 112: 135,300 VND.
- On January 5, 2023, when the goods arrive, the accountant records:
- Debit account 156: 123,000 VND;
- Credit account 151: 123,000 VND.
Example 3:
- On August 26, 2022, Company E purchased 300 monitors with a pre-VAT price of VND 600,000,000, VAT amount of VND 60,000,000. The seller sent an electronic invoice via email to Company E on the same day, August 26, 2022. It is expected that the goods will be transported to Company E’s warehouse on September 8, 2022.
- On September 7, 2022, company G ordered 100 screens from company E with a request to deliver them to company E on September 7, 2022. On September 7, 2022, company G contacted the driver carrying the 100 screens to change the route to company E’s warehouse and delivered them to company E.
In this case, company E’s accountant will account as follows:
- On August 26, 2022, when receiving an invoice for 300 monitors but not yet receiving the goods, the accountant separately tracked this invoice in the “Invoice for goods not yet in stock” file.
- On August 30, 2022, at the end of the month, if the goods have not yet arrived at the warehouse, the accountant records:
- Debit account 151: 600,000,000 VND;
- Debit account 1331: 60,000,000 VND;
- Credit account 112: 660,000,000 VND.
- On September 7, 2022, when delivering 100 monitors to company G’s warehouse, the accountant recorded:
- Debit account 632: 200,000,000 VND;
- Credit account 151: 200,000,000 VND.
- On September 8, 2022, when delivering 200 monitors to company E’s warehouse, the accountant recorded:
- Debit account 156: 400,000,000 VND;
- Credit account 151: 400,000,000 VND.
IV. Frequently asked questions about how to account for invoices before and after the goods are received
1. When the goods arrive at the warehouse but the warehouse keeper has not completed the counting procedure with the invoice, can the accountant record the order value into the warehouse account?
When the goods arrive at the warehouse but the warehouse keeper has not completed the counting procedure with the invoice, the accountant is not allowed to record the order value into the warehouse account but must separately track these invoices in the “Goods purchased but not yet in stock” file.
If by the last day of the month, the company has not completed the warehouse entry procedure, the accountant will record the invoice value in account 151 – Goods in transit.
After completing the counting procedure and proceeding to warehouse the goods, the accountant records the value of the imported goods into the corresponding warehouse account.
2. Purchased goods in transit were counted before being imported into the company’s warehouse, and were found to be partially lost for unknown reasons. The warehouse department has prepared a record of the lost value and the actual import value. What should the accountant do in the above case?
Upon receiving the minutes and warehouse receipt from the warehouse department, the accountant needs to do the following two things:
- Record the actual input value:
- Debit account 156, 152: Value of goods corresponding to actual imported quantity;
- Credit account 151: Value of goods corresponding to actual imported quantity.
- Reflects the value of lost inventory for unknown reasons:
- Debit account 1381: Lost inventory value;
- Credit account 151: Lost inventory value.