Eric Gerard Ruiz, CPA

The main objective of accounts payable internal controls is to reduce the risk of error and fraud that may proliferate in the accounting information system if not detected, prevented, and corrected on time. Having controls in place helps the A/P team deliver on their responsibilities and maintain independence in reviewing and approving all A/P transactions….

The A/P workflow starts immediately after goods have been received. The A/P clerk will first gather all the necessary documents and enter them into the accounting system. They will then review the documents to ensure the accuracy and correctness of the information. After review and approval, they will prepare the payment request and forward it…

Bad debts are uncollectible customer invoices that have already been recorded as revenue. The correct bad debt expense journal entry depends on which method you’re using. Direct method: The journal entry debits bad debt expense and credits accounts receivable (A/R). Allowance method: The journal entry debits bad debt expense and credits allowance for bad debts….

Inventory reserves are estimates for inventory losses due to physical deterioration, obsolescence, theft, and other unforeseen causes—they are not the actual cost of inventory deemed worthless. Businesses using either the last in, first out (LIFO) method or retail inventory method and complying with the US GAAP should make appropriate inventory reserves. The inventory reserve account…

A pro forma invoice (also proforma invoice) is a preliminary invoice sent to the buyer before the delivery of goods. It includes all the essential information of an invoice—except that the prices and amounts stated are quoted values only. It is not a legal contract between the buyer and the seller and is subject to…

An invoice number is a unique and sequential number assigned to each invoice document. Invoice numbers can be purely numeric, such as 10021, or alphanumeric, such as INV-10021. It allows businesses and customers to refer to a particular invoice easily when multiple invoices exist, making it much easier to match invoices with payments. For small…

Deferred revenue (also called unearned revenue or income) is a liability owed to a customer for the value of goods or services the customer has paid for but not yet received. When a customer prepays for goods or services, the business must record the receipt of cash as deferred revenue on the balance sheet and…

BILL (formerly Bill.com) is a web-based billing and invoicing software for small businesses and accounting firms. It features accounts payable (A/P) automation to streamline your processing of accounts payable and speed up the settlement of vendor invoices. Payments can be faster if the vendor is also a BILL user, thanks to the BILL vendor network….

An invoice is a document that you send to customers to request or collect payment for a good or service that has already been provided. The invoicing process starts when the business fulfills the order and delivers it to the customer. In Wave, you can create professional-looking invoices quickly and easily. In our example below,…

QuickBooks Online Advanced users can use the built-in Fixed Asset Manager to store key fixed asset information and compute depreciation. In this guide, we’ll go over how to use the QuickBooks Online Fixed Asset Manager by showing you how you can add and edit fixed assets and generate a depreciation schedule. Viewing the Fixed Asset…

QuickBooks is the most popular accounting software brand not only in the United States but also worldwide. Intuit, the owner and developer of QuickBooks, marketed it primarily as desktop software in the 1990s—but it eventually ventured into cloud accounting in 2001 through QuickBooks Online, which now earns twice the revenues of its desktop counterpart. Here…

Consignment allows businesses to sell goods via third-party sellers without requiring the sellers to pay for the goods upfront. Because consignees are only tasked with selling consigned inventory, ownership remains with the consignor until it is sold to final customers. In exchange, the consignee will get a commission from the sales. In this article, we’ll…