All 24 Invoice Processing questions
More in Invoice Processing
How are prepayments to suppliers accounted for? How do recurring invoices (e.g., rent, subscriptions) get processed efficiently? How are utility and telecom invoices with variable amounts controlled? How do you account for invoices received after period-end for goods/services already received (accruals)? How do you measure and improve AP invoice processing efficiency? What internal controls mitigate fraud risk in invoice processing? What is the difference between capital and revenue expenditure at the invoicing stage, and why does coding matter?
Advertisement
Back to results for “Reconciliations”
Accounts Payable & Receivable › Invoice Processing

What is the GR/IR (Goods Received/Invoice Received) clearing account and how is it reconciled?

Advanced

Answer

GR/IR is a temporary clearing account that captures the timing gap between receiving goods (which credits GR/IR and debits inventory/expense) and receiving the invoice (which debits GR/IR and credits AP). A balanced line nets to zero once both events occur. Reconciling GR/IR surfaces goods received but not invoiced (accrue) and invoiced but not received (investigate).
Goods receipt:   Dr Inventory  Cr GR/IR
Invoice receipt: Dr GR/IR      Cr Accounts Payable
Open GR/IR balance = received-not-invoiced (a payable to accrue).
Real-world example A quarterly GR/IR review flags $40k of receipts with no matching invoice, which are accrued and chased with suppliers.

Common follow-ups: What does a debit GR/IR balance mean? | How often should GR/IR be cleared?

Purchase Orders & 3-Way Matching Reconciliations Aging Analysis
All 24 Invoice Processing questions