How do I accrue for goods received but not yet invoiced at month-end?

Debit the relevant expense or inventory account and credit an accrued liability (or GR/IR clearing) account for the received-but-unbilled value, using the PO or receiving log to estimate the amount. Reverse the entry when the real vendor invoice posts, so the expense hits once, not twice.

By Zuny Fester, Head of Operations and Marketing

Reviewed by Zuny Fester

Published September 14, 2026Last reviewed September 14, 2026Editorial policy

Part of the accounts payable and invoice processing guide.

What triggers the accrual	Goods or services received before period-end, with no vendor invoice yet on file
What's debited	The expense or inventory account the goods relate to
What's credited	An accrued liability (or GR/IR clearing) account, not accounts payable directly
How the amount is estimated	The purchase order price or the receiving document's logged value
How it's cleared	A reversing entry in the next period, offset by the actual vendor invoice

Why this accrual exists

Under accrual accounting, an expense belongs in the period the goods or services were actually received, not the period the vendor happens to get around to invoicing. AccountingTools describes an accrued liability directly as "an obligation that an entity has assumed, usually in the absence of a confirming document, such as a supplier invoice" — recorded so the expense lands in the period it was incurred, not the period the paperwork arrives. A shipment that lands on the 28th with an invoice that doesn't show up until the following month is exactly the gap this accrual closes.

Where the clearing account comes in

Many ERPs formalize this with a dedicated GR/IR (goods received/invoice received) clearing account rather than posting straight to accounts payable. A credit balance in that account signals goods received but not yet invoiced; a debit balance signals the reverse — an invoice received for goods not yet delivered. The account exists specifically so received-but-unbilled value doesn't get mixed into the regular AP subledger, which would make it harder to tell what's a real open vendor bill and what's still an estimate.

Reversing it correctly

AccountingTools notes these entries are usually structured as reversing entries, automatically cancelling out the following period so the expense isn't double-counted once the real invoice arrives. The estimate posted at month-end (based on PO price or receiving-log value) reverses out, and the actual vendor bill — which may differ slightly on price, freight, or tax — posts in its place through the normal AP process.

Next step

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Journal entry

A $38,400 shipment received on the 29th, invoice not yet in hand

Inventory arrives on the 29th against a PO priced at $38,400; no vendor invoice has posted by close. Month-end entry: debit Inventory $38,400, credit GR/IR Clearing (or Accrued Liabilities) $38,400, flagged to auto-reverse. Next period, the reversal posts (debit GR/IR $38,400, credit Inventory $38,400), and the actual vendor bill arrives for $38,650 (a small freight surcharge) and posts through normal AP: debit Inventory $38,650, credit Accounts Payable $38,650. Net effect across the two periods: the inventory value is correct in the period the goods actually landed, and the $250 freight variance shows up cleanly in the period the real invoice arrived, rather than distorting the prior period's close.

Frequently Asked Questions

A dedicated GR/IR or accrued-liability account is cleaner because it keeps estimated, unbilled amounts separate from real open vendor bills in the AP subledger — mixing the two makes it harder to tell what's confirmed versus estimated when reconciling AP to the GL.

An aging GR/IR balance that never clears is a real signal something's wrong — either the vendor never invoiced, the goods were returned without a credit memo, or the receipt itself was recorded in error. It shouldn't sit unreviewed; it needs the same investigation an unreconciled control-account balance would.

No — it's an estimate based on the PO or receiving-log value, and the reversing entry mechanism exists specifically so a small variance against the real invoice (freight, a negotiated discount, tax) doesn't require a correcting entry. The difference just flows through in the following period.

Sources

How-to

What should be on a month-end close checklist?

A complete close checklist covers subledger lockout, bank and balance-sheet reconciliations, accrual entries, intercompany revaluation and elimination if applicable, inventory review if applicable, consolidated review, and period lock. Each task should have a clear owner and a place in the dependency order, not just a due date.

Topic

AP & Invoice Processing

Accounts payable and invoice processing is the set of steps a vendor bill goes through between arriving at a company and turning into a payment: capturing what the vendor sent, checking it against wha…

Diagnostic

What causes a three-way match failure between the PO, receipt, and invoice?

A three-way match compares the PO, the receipt (what was actually delivered), and the invoice on quantity, price, and charges. A failure means one of those three disagrees beyond tolerance — usually because the invoice bills a quantity that isn't fully receipted yet, the unit price differs from the PO, or the invoice adds a charge, like freight, the PO never included.

Diagnostic

Why does one vendor show two different balances in AP aging?

The vendor almost certainly exists as two separate records in your vendor master file — created under slightly different names (a typo, a rebrand, a merger, a re-onboarding) — so bills and credits are split across both. AP aging reports by vendor record, not by real-world vendor, so it shows two partial balances instead of one true balance.