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Tuesday, June 28, 2005

My Payables are Not Posting Properly.


I am the bookkeeper for a retail windows store. Over half of our
business is custom orders. Our profit and loss is not recording cost
goods sold on custom orders correctly because of this senario:

A customer orders windows at the end of the month. We record a sales
receipt. This goes into Accounts Receivable towards sales for the

We order the windows from the vendor--creating a purchase order. After
about 10 days, the windows arrive and we create an item receipt. The
item receipt records into Accounts Payable and this puts the Cost of
Goods sold for this item into the month following when the sales were
recorded. I use the item receipt and bill features to track our
merchandise and billing with the vendors. I really don't want to
change the date after the billing is closed to throw the expense back to the
same month as the sales.

The best solution would be to have purchase orders post to accounts
payable and count towards Cost of Goods Sold--since the sale and the
order happen on the same day. Does anyone know if this is possible?

If not, does anyone have any ideas how I can get an accurate monthly


It sounds like you are using QuickBooks very well. Actually, one would argue that your financials are correct, even though they may not be as you would like them to be. According to accounting principles, you do not book a payable until you have possession of the merchandise that you ordered. So if the windows are being shipped FOB buyer, then you don't record the payable until the goods reach your dock. On the other hand, if the windows ship FOB seller, then you are liable when the windows ship. In any case the date most likely would not be the date you ordered them. Actually I believe QuickBooks is making the accruals properly, and the only way to change it would be to override the item receipt/bill date, which I would not suggest.

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