Received Not Billed (RNB)

In one sentence: Received not billed (RNB) is an accrual that represents goods or services the company has received but for which the vendor has not yet submitted an invoice, creating a liability that must be estimated at period-end.

What Is Received Not Billed?

When a company receives goods or services (recorded via a goods receipt note) but the vendor invoice hasn't arrived yet, the transaction sits in a "received not billed" state. The company has an obligation to pay but no invoice to process.

At month-end or quarter-end, finance teams must accrue these amounts to ensure financial statements accurately reflect outstanding liabilities. The RNB balance represents the gap between what's been received and what's been billed.

Why It Matters

RNB is a leading indicator of AP process health. A growing RNB balance signals problems upstream:

• Financial statement accuracy: Unaccrued RNB means liabilities are understated and expenses are underreported for the period.
• Month-end close delays: Estimating and posting RNB accruals is manual, time-consuming work that extends close cycles.
• Budget distortion: Committed spend that hasn't been invoiced doesn't appear in budget reports, making available budget look larger than it actually is.
• Audit scrutiny: Auditors examine RNB accruals closely. Large or volatile balances raise questions about accrual methodology and vendor management.

How It Works

1. Goods received: The receiving team logs a GRN, recording delivery against a purchase order.
2. Invoice not yet received: The vendor hasn't submitted their invoice. The PO is partially or fully received but remains open.
3. RNB identified: The system flags POs where receipts exist but no matching invoice has been recorded.
4. Accrual posted: At period-end, finance estimates the liability based on PO amounts and posts an accrual journal entry.
5. Invoice arrives: When the vendor invoice is eventually received, the accrual is reversed and the invoice is processed normally through 3-way matching.

Common Problems

• Manual accrual estimation. Without automated RNB reports, finance teams must manually compare GRN records against open invoices to calculate the accrual.
• Stale POs inflate RNB. Aged POs where goods were received months ago but never invoiced create persistent RNB balances that may never resolve.
• Partial deliveries complicate calculation. When a PO has multiple partial receipts, determining the uninvoiced portion requires line-item-level analysis.
• No vendor follow-up. Large RNB balances often mean the vendor is late sending invoices, but nobody is proactively reaching out to request them.

FAQ

What is a healthy RNB balance?

RNB should represent recent receipts (last 7-14 days) where invoices are in transit. If a significant portion of RNB is older than 30 days, it indicates vendor invoicing delays or internal process gaps that need investigation.

How does RNB affect month-end close?

Finance teams must estimate and post accruals for all RNB items, then reverse those accruals in the next period when invoices arrive. High RNB volume makes close more manual and error-prone. Reducing RNB through vendor follow-up and faster invoicing directly compresses close time.

Can RNB accruals be automated?

Yes. ERP systems and AP platforms can auto-generate RNB accrual reports by comparing GRN records against invoiced amounts. Some systems auto-post accrual journal entries at period-end, eliminating the manual estimation step entirely.