What is best practice for accounting for items purchased before the opening balances but fulfilled after?

Hi,

I have 9 orders that were placed with payments recorded which are included in the the opening balances entered but were not fulfilled until after the opening balance date. I’m looking for the best way to handle this situation preserving the correct COGS.

Would the following correctly handle the situation?

  1. Create Sales Orders for the 9 orders
  2. Invoice each order
  3. Pay each Invoice with a Customer Payment
  4. Create a reversing Journal Entry to reverse the Customer Payment amounts
  5. Create Item Fulfillments
  6. Profit!

Does this make sense ? Is there a better option? Will this cause side effects?

Thanks in advance!

Beginner Asked on December 1, 2019 in Accounting.
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1 Answer(s)

This is an option, but if you go this way you’ll need to coordinate with your Bank Rec person as they will see extra activity. Another possible option is simply to Close the SOs once you have fulfilled them, though that then needs coordination with your invoicing department (so they don’t raise invoices they should not).

Advanced Answered on December 3, 2019.
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