Hi. I look after the accounts for a small business (in Xero) and have a recurring headache which looking for help with.
We regularly receive invoices for costs incurred much earlier. We use accrual accounting where costs are highlighted to me, but an example might be that the team brings in an external contractor in January (without flagging to me), she then dates an invoice in February and only sends it to us in April. Xero doesn't seem to give me an option to date the cost in April, and automatically takes the cost at invoice date in February.
This gives me a problem as I need to prepare our board numbers in the middle of the next month. In the above example, I'd need to adjust my February numbers in my April board deck. Almost monthly I'm needing to highlight prior month adjustments and I'd really rather be able to close my books formally.
I'm aware the ideal treatment is to accrue cost when incurred, but as above sometimes costs aren't flagged to me. Another approach could be to post a deferral from Feb to Apr, but this doesn't strike me as appropriate treatment.
Therefore my question is : (a) is there a way to get Xero to recognise cost at posting date / not invoice date, or (b) would any eventual audit flag a problem if I had posted invoices at the date invoice received, not the invoice date itself?
Any help much appreciated