Category Archives: 1.11 Revenue

Comparing sales orders against shipments

Why would you monitor your sales? Do know that they indeed happened to put it in short. Sales are not just about making accounting entries, but also ensuring that your customers are getting what they ordered. If you think about it, in a case where the sale hasn’t in fact taken place (that is the customer didn’t get anything) you’re not getting paid either (and you could be asked to pay back any prepayments made for the purchase by the customer if that’s the case).  Continue reading

Stage of completion method – using subcontractors

There’s nothing wrong with using subcontractors when providing service for a customer – whether it’s because you don’t have all the skills, materials or simply lack the time. As I’ve said before, be the reasons what they are, it’s all about proper accounting treatment. For almost all the transactions out there there’s an accounting treatment or even treatments.

So when you’re using subcontractors for your service, you must keep in mind two things: you’re providing service for the customer and subcontractor’s work is part of your service you’re delivering.  Continue reading

Accruing for sales bonuses regularly

Sales bonuses are something not everyone is giving to their customers, but when you do, there are a few considerations to be kept in mind.

For one, do you issue credit invoices or does the customer itself issue invoices to you? Why is it important? Besides the obvious, defining obligations, it’s also a question of who does the initial measuring of the bonus and who has the opportunity to check if the calculation is accurate.  Continue reading

Are sales bonuses an expense or decrease in revenue?

I can understand why this question may arise. On some cases you’re actually paying and on some cases you decrease outstanding balances for an example.

Either way, sales bonuses you pay to your customers, they’re always, always decreasing your revenue. On the other hand bonuses you get from your suppliers decrease your expenses. It’s always about decreasing the item you got a bonus for or paid a bonus.  Continue reading