FAQ: Accounting Impact

When does an invoice posting happen—on creation or on payment?

An invoice posting starts when you create the invoice, not when payment arrives. When you create an invoice, Usystems immediately records it in Accounts Receivable (money owed to you) and Sales Revenue (income). Later, when the customer pays, a second posting records the cash received. This is called accrual accounting, which recognizes revenue when earned (at the time of sale), not when cash is collected.

Does canceling an invoice reverse the posting?

Yes. If you cancel or void an invoice, Usystems reverses all postings related to it. Both the revenue and the accounts receivable entries are reversed, and if inventory was deducted, it is added back. The general ledger returns to the state it was in before the invoice was created.

Can I post an invoice with a future date?

This depends on your company settings. Some businesses create invoices with a future date (e.g., for invoices that will be printed tomorrow), and Usystems allows this. The posting date is determined by the invoice date you choose when creating the invoice. Check your company's accounting policies to see if this is allowed.

What if I create an invoice but don't finish it?

If you save an invoice as a draft but do not submit it, Usystems does not post it to the general ledger. A draft invoice has no accounting effect. It only posts when you change the status to Sent or a status that indicates the invoice has been issued.

How does inventory cost affect profit?

When you invoice inventory items, Usystems posts the cost of goods sold (COGS) at your cost price (what you paid for the item), not the selling price. The difference between the selling price and the cost is your gross profit. For example, if you paid 100 AFN for an item and sell it for 200 AFN, COGS is posted as 100 AFN and your profit is 100 AFN. This is why tracking item costs accurately is critical for correct profit reporting.

What accounts does an invoice use?

A basic invoice uses these accounts:

• Accounts Receivable — increases when the invoice is created (debit)
• Sales Revenue — increases when the invoice is created (credit)
• Cash — increases when the invoice is paid (debit)
• Accounts Receivable — decreases when the invoice is paid (credit)

If the invoice includes inventory items, it also posts to:

• Cost of Goods Sold — increases by the item cost (debit)
• Inventory — decreases by the item cost (credit)

If the invoice has a discount or tax, additional accounts may be used (e.g., Sales Discount, Sales Tax Payable). See What an invoice posts to the general ledger for the full details.

Can I edit an invoice after it posts?

Some changes are allowed after an invoice posts, but others are restricted depending on your company's settings and the invoice status. For example:

• Editing customer details (name, address) may be allowed without changing the posting.
• Editing line items or amounts typically requires canceling and recreating the invoice to avoid corrupting the accounting record.

Check your company's policies or contact your accounting administrator before editing a posted invoice.

Does creating a sales receipt post differently from an invoice?

Yes. A sales receipt is for immediate cash sales (money is received at the time of sale), while an invoice is for credit sales (money is received later). Usystems posts them differently:

• Invoice: Debit Accounts Receivable, Credit Revenue (posting happens on creation).
• Sales receipt: Debit Cash, Credit Revenue (posting happens on creation and no receivable is created).

For more on choosing between these documents, see Which sales document should I use?.

How do I verify that an invoice posted correctly?

Go to Reports → Journal or Transactions to view all postings.
Open in Usystems

Filter by the invoice number or date, and you will see each debit and credit line. The total debits and total credits should be equal (double-entry bookkeeping). If they don't match or a posting is missing, contact your accounting support.