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Invoice date vs. Invoice received date (Xero)

Booking invoices based on their date means I need to amend prior months

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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

 - Anon



Replies (3)

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By atleastisoundknowledgable...
03rd Jul 2019 17:20

As far as I’m aware, you can’t get Xero to do what you want. Just post them on the first day of the ‘open’ month. Will it be picked up in the future - possibly if you have an audit, unlikely otherwise. I would probably put the date of the actual invoice at the beginning of the invoice narrative, but that’s up to you.

Are you proposing to just have the (in your example) contractor cost in April and not footnote it anywhere?

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By frankfx
03rd Jul 2019 20:50

you preparers numbers for the board of directors on a monthly basis.

a member of their staff is in efficient .
this causes you avoidable problems.

Resolve this nonsense by getting client employee to work efficiently , and in turn the suppliers to the client to be efficient too.

You can be proactive when approaching this matter with the directors .

they want meaningful, reliable, timely information to monitor and measure business performance.

when you receive better quality data, the information you provide to the Board will be significantly better , as you will have more confidence in its veracity

Education education education...….. is the way forward otherwise , if the business grows this issue will be magnified, and could well be infectious.

The board will thankyou for your insight and desire to implement a good simple system to capture transactions in close to ''real time'

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By johnt27
04th Jul 2019 14:57

You have two reasonable solutions already, here's a third - implement a PO system. You'll then have control over purchases and an indication of likely costs to accrue. Then if you do receive late invoices you can manage the process and post in the current month, with an accurate accrual reversal.

There's absolutely nothing wrong with operating strict cut off, but irrespective of the system, you always need a way of dealing with late invoices.

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