GRN with Provisional Accounting

What Is Provisional Accounting?

When you receive goods (GRN), there is a time gap before the supplier's invoice arrives. During this gap, your accounts do not reflect the liability. Provisional accounting creates a temporary accounting entry at the time of GRN, so your books reflect the liability immediately.

How It Works

1. GRN is submitted with provisional accounting enabled.
2. PayInvoice Next posts a provisional journal entry: Debit Stock/Expense account, Credit Provisional Liability account.
3. When the Purchase Invoice is later submitted against this GRN, the provisional entry is automatically reversed and replaced by the actual invoice entry.

Enabling Provisional Accounting

• The Enable Provisional Accounting setting must be active (check with your administrator).
• When enabled, the GRN form shows the provisional accounting checkbox.
• The GRN Type field may show "PO-Based GRN" — provisional accounting typically applies only to PO-based receipts.

Impact on Financial Reports

• Between GRN and PI: the provisional liability appears in your balance sheet under a provisional liability account.
• After PI submission: the provisional entry is reversed and the actual expense/liability is posted.

TIP

Provisional accounting is important for month-end accuracy. If goods are received in March but the invoice arrives in April, provisional accounting ensures the March books reflect the liability.

Related Pages

• Create a GRN — How to create GRN with provisional accounting
• Provisional Accounting — Full accounting details