Stock Received but Not Billed: Understanding the Accounting Impact

Stock Received but Not Billed: Understanding the Accounting Impact

Introduction

In procurement, goods often arrive before the supplier's invoice. iVendNext handles this through "Stock Received but Not Billed" (SRNB), a critical accounting mechanism that ensures accurate financial reporting while maintaining inventory integrity. This article explains how SRNB works, its accounting implications, and best practices for reconciliation.




1. What is "Stock Received but Not Billed"?

Definition:
A temporary accounting entry that tracks goods physically received but not yet invoiced by the supplier.


Purpose:
✔ Prevents double-counting expenses.
✔ Maintains accurate inventory valuation.
✔ Aligns with accrual accounting principles.


When It Occurs:


  • Goods arrive before the invoice (common in import/export businesses).

  • Supplier delays billing due to pricing disputes or documentation.



2. How SRNB Works in iVendNext

Step 1: Purchase Receipt Creation

When goods are received:


  • Warehouse Account (Debit): Increases stock value.

  • "Stock Received but Not Billed" (Credit): Records pending liability.


Step 2: Purchase Invoice Posting

When the supplier’s invoice arrives:


  • "Stock Received but Not Billed" (Debit): Clears the temporary liability.

  • Supplier Account (Credit): Records accounts payable.


Result:


  • Inventory and financial records stay synchronized.

  • No duplicate expense bookings.



3. Why SRNB Matters for Financial Accuracy

Scenario

Without SRNB

With SRNB

Goods Received

Expense booked immediately.

Stock value increases (no expense booked).

Invoice Received

Expense booked again → Error!

Liability cleared; payable recorded.

Financial Statements

Overstated expenses.

Accurate cost tracking.



4. Reconciling SRNB: Step-by-Step

Step 1: Monitor the SRNB Account

Navigate to: Accounts > Chart of Accounts > "Stock Received but Not Billed"


Expected Balance:


  • Credit Balance: Indicates unbilled stock value.

  • Zero Balance: All receipts invoiced.


Step 2: Match Purchase Receipts to Invoices

  1. Go to Purchase Receipt List.

  2. Filter for status "To Bill".

  3. Verify pending invoices for each receipt.


Step 3: Resolve Discrepancies

  • Missing Invoices? Follow up with suppliers.

  • Quantity/Rate Mismatches? Use Purchase Invoice adjustments.



5. Common Challenges & Solutions

Issue

Solution

SRNB balance grows uncontrollably

Audit unbilled receipts monthly.

Invoice rates differ from receipt rates

Use Landed Cost Vouchers to adjust valuations.

Goods returned but not deducted

Create a Purchase Return to reverse SRNB entries.




6. Automating SRNB Reconciliation

  1. Enable Alerts: Set up notifications for unbilled receipts older than 30 days.

  2. Integrate with AP Systems: Link iVendNext to accounting software for real-time matching.

  3. Use Reports: Generate "Pending GRN vs. Invoice" reports (Home > Stock > Reports).



7. Best Practices

✅ Regular Reconciliations – Review SRNB weekly to avoid aging liabilities.
✅ Document Exceptions – Note reasons for unbilled receipts (e.g., "customs delay").
✅ Train Procurement Teams – Ensure receipts include all supplier details (PO, delivery note).
✅ Leverage Landed Costs – Adjust item costs for duties/freight before invoicing.



Conclusion

"Stock Received but Not Billed" is more than a temporary account—it’s the backbone of accurate inventory and financial management in iVendNext. By mastering SRNB workflows, businesses can prevent costly accounting errors and maintain trust with suppliers.



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