Accounting Dilemma: Should We Record Purchases by Invoice Date or Receipt Date?

Please tell me which date of goods purchase should be taken in the company's accounting book - the invoice date or the date on which we receive the goods (when the goods are received by the store).

It is the date on which your security receives the material. In some companies, security prepares a Good Inwards Receipt (GIR), while in others, it does not. If a GIR is not prepared, security personnel, after checking the correctness as per the invoice or dispatch note, stamps it and sends the goods to the store. The store may take 1-2 days to enter the data into the system.

Ok...

Regards,
Dinesh V Divekar

Goods Receipt and Accounting Dates

There are lots of things to consider while dealing with stores. Usually, whenever a material is received in the company, security will conduct a GIR (Goods Inspection Report) or GRN (Goods Received Note). Then, the stores will inspect the material to determine if it is in good condition. Following that, they will call the indenter and technical personnel for inspection. Once the inspection is completed, the date on which the goods are inspected is recorded as the accounting date.

Additionally, many companies have their own procedures. For instance, a company may purchase a machine but not use it for two months. In such cases, the date of actual usage is considered the date of commissioning.

For simplicity, if there is any confusion, one can use the date of the invoice as the date of receipt for accounting purposes.

There is a risk of accepting the date of the invoice as the date of acceptance. Suppose you receive material from a far-off place about 2,000-3,000 km away. In that case, even if it is received by land transport, it still takes anything between 4 and 7 days. In such a case, should the company lose interest for 4-7 days?

Other members may also contribute their views.

Regards,
Dinesh V Divekar