Something that\u2019s important to understand is that there are times when sales revenue is not a one-off transaction, but rather a stream that should be recognized over a period the agreement is in force or the service is being provided.\u00a0<\/p>\n
Revenue is rarely accounted cash basis (when money is actually collected), but when risks and rewards are transferred or the obligation to provide defined service (-s) has ended. It\u2019s therefore crucial to read through the agreements, understand with the respective parties together the expectations.<\/p>\n
Revenue from services is often the most complicated. An often time the sale of some goods may include also a sale of a service and it\u2019s not just understanding the difference, but encompassing that this service may require a different treatment on the accounts as well.<\/p>\n
If the service is really one-off thing, e.g. putting some equipment together and this doesn\u2019t take long, say a week or two, the revenue from this can be measured and accounted fairly easily within the month the service is provided.<\/p>\n
However, it\u2019s important to understand if there are some activities the seller is required to provide for a longer period than just a week or two. Such services may require not only accounting over a period of time, but they may also require finding their price (on occasions when the service itself doesn\u2019t have a price separate within the agreement).<\/p>\n","protected":false},"excerpt":{"rendered":"
Something that\u2019s important to understand is that there are times when sales revenue is not a one-off transaction, but rather a stream that should be recognized over a period the agreement is in force or the service is being provided.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[69],"tags":[],"class_list":["post-5051","post","type-post","status-publish","format-standard","hentry","category-1-17-accounts-receivable"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5051","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=5051"}],"version-history":[{"count":1,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5051\/revisions"}],"predecessor-version":[{"id":5052,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5051\/revisions\/5052"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=5051"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=5051"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=5051"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}