Good day!
Can i ask how do you treat or record your DP recoupment in your books. As of our current practice, it is during invoice processing and due to duration of the project the down payment will be be fully recouped on the last invoice/progress billing. As down payment transactions are part of or budget utilization report it causes negative utilization on the year the invoice was processed which is usually a year after the service or goods were rendered or delivered.
If we record the recoupment at the time the services/goods are rendered /delivered by debit Accounts Payable and credit Project Prepayment, this will result to positive or abnormal balance in the Accounts Payable account and will be subject for financial audit.
The solution i am thinking is the possibility if partial recoupment at the time of goods receipt or service entry if this can be done by the system automatically. The DP clearing entries from this partial recoupment will be captured in the budget utilization/FM (as our policy is to recoup based on percentage of services/goods delivered or rendered) and this will be disregarded in the financial accounting/FI (thru a reversal entry and recouped for financial accounting purposes will be recorded at the time of invoice processing).
Any thoughts on this or best practices you can share?
Thanks a lot.
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