Accounting Dilemma: Which Date Should You Use for Purchases and Services?

Accounting for Purchase Dates

Which date should be considered for the purchase of material or service for accounting purposes?

• The date mentioned on the bill.
• The date on which the material is received.

Service Date Consideration

What about the date of the service provided to us? Which date should be considered - the service receiving date or the bill receiving date? Most of the time, it happens that the bill is received after a few days of the service provided. Please clarify everything.

Payment Procedures and Invoice Submission

Normally, payment procedures follow the company's terms. In many companies, vendors submit their invoices on the same day they deliver or service the materials, thus counting as the same day of delivery.

In your case, if the vendor submits the invoice after a few days, you should consider the submission date of the invoice only, not the delivery date.

I hope this is clear.

Thank you.

Consideration of Delivery Date for Accounting

The date of delivery shall be considered. For long-distance delivery or consignment from overseas, the billing date may be one month prior. This is subject to the P.O. conditions.

Regards,
Pon

Delivery Date is considered as the Delivery Challan Date. The invoice date is considered as the purchase date. Most of the Purchase Order Terms & Conditions are based on the invoice date.

Delivery Date is considered as the Delivery Challan Date. The invoice date is considered as the purchase date. Most of the Purchase Order Terms & Conditions are based on the invoice date.

Importance of Delivery Date

Sorry, my dear, but the delivery date matters most. The defects liability period starts from the date of delivery and not from the invoicing date.

Regards, Pon

Good Morning Ankush, invoices are accounted for based on the Goods Receipt Note (GRN).

Understanding Goods Receipt Note (GRN)

GRN shows the date of receipt of material or service (inward entry at the company premises). This date is to be considered for accounting.

Hope this satisfies you.

Thank You,
Chandrakant

Consideration of Payment Dates for Accounting

Money is money. It provides interest if it is in the bank. As an employee, you should give the advantage to your company as they pay you. So, it is a wise decision to consider the older date for payment. If the bill date is later, then that date is considered, and the advantage benefits our organization. This would also ensure that vendors produce the bill on the same day or the next day.

With regards,
IJR