After making a payment against a purchase invoice for a single drop shipment item, I realized that the account
Stock Received But Not Billed, had been credited.
However, I was of the opinion that with drop shipment, the expense account
Cost of Goods Sold would be debited directly. In any case I already paid for the item (stock), so “not billed” is not true.
So my question is: Why was the account
Stock Received But Not Billed credited?
More information: At the time I made the payment to the supplier, I had already issued a sales invoice to the customer, and the invoice had been paid (I forgot to make the payment against the purchase order first).
I am not sure if this work flow had something to do with the account
Stock Received But Not Billed being credited.
Update: I forgot to reload the chart of accounts. After reloading, the account “Stock Received But Not Billed” showed to identical entries, one debit, one credit, making a total of zero.
However, I still want to ask, why these accounts are hit during drop shipment. I thought because we don’t manage any physical stock, the expense account would be debited directly.
Could you check your Item Master and see if the Item that you are using for drop ship is a Non Stock Item (‘Maintain Stock’ unchecked) and in the Supplier Details section you have “Delivered By Supplier” checked?
I just checked:
- Delivered by Supplier (Drop Ship): Checked
- Maintain Stock: Checked
Actually I asked about whether or not Maintain Stock should be checked with drop ship items:
Drop Ship: Do I have to Uncheck The “Maintain Stock” Option?
How I understood the answer is that Maintain Stock needs to be checked even with drop ship items.
It is not mandatory to check it, but if you do and in case you accidentally create a purchase receipt against it, it could possibly lead to a scenario you are facing. I tried with stock item (unchecked) and drop ship(checked) and it seemed to work fine.
Thanks for this information. Next time I will just uncheck
Is Stock Item. Doing it this way seems more logical, too, as we do not maintain any physical stock for drop shipment items.