Practical guide
How to handle supplier payables and receivables at year-end
At year-end almost every condominium has supplier invoices recorded but not yet paid: these are supplier payables, and they must appear in the statement of assets of the account required by Article 1130-bis of the Italian Civil Code. The cost of a supply belongs to the year in which the service was provided, regardless of the payment date: this is the accrual principle. Handling these open items correctly avoids inflating the operating surplus and pushing onto the following year costs that do not belong to it. This guide explains how to record, check and close supplier payables and receivables.
Year-end checks on suppliers
- All invoices received and belonging to the year are recorded
- Ongoing supplies (energy, cleaning, lift) have the accrued cost up to 31 December
- Payments in transit across the year-end are classified in the correct year
- Advances paid to suppliers are recorded as receivables, not costs
- Supplier payables in the statement of assets match the unpaid invoices
- Withholding tax on fees is set aside and carried correctly
Accrual and cash: why supplier payables matter
The condominium account combines the cash plane, which records actual money movements, and the accrual plane, which attributes costs to the year they refer to. An invoice for a service provided in December but paid in January is a cost of the closed year and a payable to the supplier at the closing date.
If that invoice were not recorded, the account would show fewer expenses and a fictitious operating surplus, while the cost would fall on the following year, penalising other owners. Correctly recording supplier payables is therefore what makes the account truthful and consistent from one year to the next.
How to record invoices not yet paid
The first step is to gather every invoice received that refers to the year, including those arriving in the first days of the new year but relating to services provided by 31 December. Each invoice generates an accrued cost and, until paid, a payable to the supplier in the statement of assets.
For ongoing supplies it helps to ask suppliers for an updated statement or to estimate the accrued share based on consumption. Energy, water, cleaning and lift maintenance accrue day by day: the part relating to the year must be charged even if the invoice arrives after closing.
- Invoice received and accrued: cost of the year plus payable to supplier
- Ongoing service across the year-end: accrued share up to 31 December
- Advance paid to supplier: receivable from supplier, not a cost
Receivables from suppliers and advances
Less frequent but equally important are receivables from suppliers. They arise when the condominium has paid an advance for a service not yet provided, or is entitled to a refund, for example a credit adjustment on a supply. These amounts are not costs of the year but asset items in the statement of assets.
Confusing an advance with a cost is a mistake that unduly reduces the operating surplus. An advance becomes a cost only when the service is actually provided, in the accrual year. Until then it remains a receivable the condominium holds against the supplier and must be shown separately.
Withholding tax and related obligations
When the condominium pays fees subject to withholding, for example to a professional or for maintenance works, it acts as a withholding agent and retains the withholding tax to be paid to the Revenue. At year-end, withholding retained but not yet paid is a payable to the Revenue, distinct from the payable to the supplier.
Keeping these items separate allows both the accrued cost and the tax obligations to be reconstructed correctly. The explanatory summary note of the account is the right place to illustrate the most significant supplier payables and the items still open, so the meeting understands the condominium's real debt position.
Closing open items in an orderly way
At closing it helps to prepare a list of suppliers with the amount owed to each, ticking off paid invoices and those still open. This list feeds the supplier payables in the statement of assets and makes the tie-out between accrued costs, payments and residuals easier.
Software that links invoice recording, payment and the statement of assets keeps open items aligned and flags invoices not yet settled. AmministraPro manages the supplier register, separates accrual from cash and automatically carries supplier payables into the account: the features are described in /funzioni and the plans in /prezzi.
Frequently asked questions
Does an invoice paid in January go into the previous year's account?
It depends on accrual. If the invoice refers to a service provided by 31 December, the cost belongs to the closed year and appears at the closing date as a payable to the supplier, even if payment is made in January. If instead the service is provided in the new year, the cost accrues to the following year.
What is the difference between a supplier payable and an accrued cost?
The accrued cost is the charge attributed to the year in which the service was provided. The supplier payable is the part of that cost not yet paid at the closing date. An accrued cost may already be paid, in which case it generates no payable; if unpaid, it stays among the payables in the statement of assets until settled.
Are advances to suppliers costs of the year?
No. An advance paid for a service not yet provided is a receivable from the supplier, an asset item in the statement of assets. It becomes a cost only when the service is actually performed, in the accrual year. Recording it immediately as an expense would unduly reduce the operating result of the year it was paid.
Where are supplier payables shown in the account?
In the statement of assets, that is the financial summary of the account required by Article 1130-bis of the Italian Civil Code, together with receivables from owners, the funds and the cash balance. This is where the difference between available liquidity and the operating result is explained: supplier payables are one of the items generating that gap.
How is withholding tax treated at year-end?
Withholding retained on subject fees but not yet paid to the Revenue at the closing date is a payable to the Revenue, distinct from the payable to the supplier. It must be kept separate in the statement of assets and reported in the condominium's tax obligations, as it acts as a withholding agent. Orderly management avoids errors in payments and certifications.
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