What happens if the expenses you budgeted are overrun and the agreement and transaction therein ends in a loss for your company?

Financial performance wise obviously you may see a way to change something within the transaction and service – materials to be used, less personnel, more effective approach and what not – that would be trying to achieve the goal.  Continue reading →

Determining the stage or percentage of the transaction and how much of it is complete and what remains to be completed is one thing. It’s another, although not completely unrelated, to record the transactions in accounting. Under “transactions” I mean not only the revenue, but also receivables and liabilities.

The initial basis for any accounting record is usually either an agreement or an invoice. When performing services over a longer period and using stage of completion, you’re most likely bound to an agreement. This agreement defines the services, quantitative aspects if applicable and what’s more, it also sets out the payment schedule and if any conditions are related to those invoices.  Continue reading →

In situations where you provide services over a longer period of time recognizing revenue should be measured and accounted for using the stage of completion method (also named as percentage of completion method). This method allows revenues to be recognized in periods the services are rendered in.  Continue reading →

In some cases it may be so that you’ve decided to give your clients the right to return either defected or not needed goods or even more regardless of the reason, they have the right to return the goods without questions asked. It’s not only the right to return goods, but also claim what they paid or not pay what they owe.  Continue reading →

When affected by sales tax, you on one hand must keep in mind that the tax is not part of your revenue. On the other hand you still must treat the tax on your statements.

It’s one thing declaring the tax – there are declarations, forms etc. applicable in your country and subject to local guidance. Each country has its own specific regulations for which we suggest you consult your local advisor or legislation yourself.  Continue reading →

Say that you’ve given your clients the right to return their goods subject to conditions. When those conditions are met, some of them use the right. It’s one thing what you do with the goods, another how you account for the returning of the goods in your financial statements.  Continue reading →

Sales tax is something you’re most likely obliged to pay to your local authorities for the sales you’re making. It’s usually a fixed rate for types of goods and services, i.e. in some countries food and essentials have lower rates and luxury items may be subject to higher sales tax rate.  Continue reading →