newbie question; Accounts Payable, making payments (fwd)

[Derek Atkins]

Your input is not necessary here.  See bug #121420.

-derek

Dale Alspach <alspach at math.okstate.edu> writes:

> Since I do not use this portion of gnucash, I was not aware of this
> feature. Many accounting systems do this but my experience from the
> customer side in dealing  with this type of FIFO system have been unpleasant.
>
> Basically this system assumes  that there is never anything wrong with a
> particular order.  Here is what can happen.
>
> I place 12 orders per month with a certain supplier. Order #4  arrives
> damaged or is
> backordered and is expensive. As a customer I pay for orders 1-3 and 5-12
> when the monthly statement arrives. The current month orders 13-24 are
> made. I get the new monthly statement and it shows that I owe for orders
> 6-24.  Why? Because the FIFO system applied the payments to orders 1-5.
>
> I have had companies attempt to charge interest in this situation.
> The company does not want to void the original order because they plan to
> fill it and they leave it in the system. The part of the system that
> computes interest charges only looks to see whether the last statement was
> paid in full.
>
> The customer looks at the statement and gets annoyed because he knows he
> has paid for items 6-12 and proper delivery of #4 has not been made.
> Assuming all was well with orders 13-24, the customer pays for those.
> Depending on the costs of the items, the next statement may show the
> account to be two months in arrears. 
>
> My 2 cents.
>
> Dale
>
>
> ------- Forwarded Message
>
> ...
>
> Payments are not applied to a particular invoice, they are applied to
> the customer/vendor directly, and will be applied on a FIFO basis to
> the existing list of open invoices.
>
> ...
>
> - -derek
>
>
> - -- 
>
>
> ------- End of Forwarded Message
>
>
>
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>

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available