If accountant receives bills later the month to which it relates then how to Treat it in the books.
Like bill of MAY Received in AUGUST then how to book it as the expense is of MAY and if we treat in books it on May then we have to pay interest on it so pls guide me
u hv to book the expense in MAY month itself
First of all its not your fault to received bill in August although Bill date is May. So don’t worry.
Make some formalities by your self
1. Write the receiving date on Bill i.e. Received on ....... (Signature of Authorised person of who dealing with that party, or can by your self also if not possible)
2. Book that Bill in Receiving Date and TDS deduct as per Bill you will be not need to pay interest
3. File it as per Booking in Account Books.
First of all its not your fault to received bill in August although Bill date is May. So don’t worry.
Make some formalities by your self
1. Write the receiving date on Bill i.e. Received on ....... (Signature of Authorised person of who dealing with that party, or can by your self also if not possible)
2. Book that Bill in Receiving Date and TDS deduct as per Bill you will be not need to pay interest
3. File it as per Booking in Account Books.
Dear Amit
In your case, whether you account in May or August does not matter as they fall within the same financial year. As for TDS implication, you can account in August and pay the corresponding TDS by 7th September.
However, if you MUST account the bill in MAY itself, for monthly MIS or quarterly reporting purposes, there could be 2 situations,
1. You know the exact amount for the bill in May - If so, credit the party account (or a provision account, if you consider such amount more as a provision/estimate than as an expense) with the known bill amount and pay the TDS for the same, latest by 7th June. Here, there is no problem of interest on late remittance of TDS. Later, when you receive the bill in August, book the bill against the provision by crediting party account and debiting provision account and pay off the party net of TDS. Report this amount in the Q1 TDS return.
2. You are not sure of the exact amount of the bill in May - then, a suggestion could be to make an estimate of the bill based on the available information, make a provision for that amount and pay the TDS for the provision made latest by June 7th. Report this in Q1 TDS Return. Thereafter, when you actually receive the bill, account the same by debiting the provision and crediting the party account. If the actual bill received in August is more than the provision made in May, account the excess amount as expense and pay the TDS for the differential amount latest by 7th September. Here again, i dont beleive there will be problem regarding the interest on late remittance of TDS. Report this differntial amount in Q2 TDS Return.
Correct me if I am wrong anyone!
Regards
Ajay
CAclubindia
