Say that you bought goods from your regular supplier (or even not so regular, but just this one time) and for some odd reason beyond you they’re not issuing an invoice for the purchase. The reasons may vary as human mind is surprising at times, so let them be. How would you however deal with the situation if you’re facing an audit? Continue reading
Category Archives: 2 Processes
Deliver terms in short
When selling your goods to a distance, it’s crucial to set the transfer or delivery terms. It’s not so much for understanding who has the rewards from the ownership but the risks. If something were to happen with the goods while in transfer, someone has to bear the costs. Continue reading
Sale of goods
Sale of goods is seemingly simple – you have goods, you have a customer who wants to buy them and you sell them. As you sell them, you recognize the sale in your accounts and that’s all really. Continue reading
Treating supplier credits for expenses and inventories
How does one come about treating supplier credits in their accounting? You’ve already accounted for the expense or the asset and now you obtained a credit for it.
The idea behind a credit invoice is usually decreasing the initial amount, hence the word “credit”, however note that the treatment, whether it’s a credit invoice or an additional invoice (that is to increase the expense), the treatment doesn’t really change. Continue reading
Declaring taxes, tax accounting
Taxes in most countries are a normal part of every business, your sales are taxed, you have to pay certain fees for certain activities (i.e. point of sale, waste producing etc.) or your profits are taxed. Remember, it could be you’re subject to all of those taxes and more. In most countries you’d also be liable for withholding and paying taxes on payroll expenses. In short some could say that each and every step can be taxed. Whether they are, is part of a countries own legislation and political judgments, but matter of fact is that when doing business, you’re subject to some kind of tax. Continue reading
Is it better to pay just part of the balance to the supplier or wait until full payment can be made
You have irregular cash flows and as such, you don’t always make the amounts for the due dates. Needless to say that it’s possibly poor cash flow management from your part, but it also begs to question which would make more sense – to pay up partly or wait until you can make a full payment to your supplier.
First things first, I would make it clear with the supplier who is the counterparty why such a situation arises in the first place, if it’s a permanent situation and how do you plan to ensure they will still get the money. It’s not just letting them know, but also agreeing that it’s acceptable for them aswell. It’s about agreeing on the situation and provided you’re interested in the services and / or goods, you do really want to do that. Continue reading
My client pays in instalments and not in full
Let’s presume that your client is for some reason either unable or simply deciding on paying in instalments to you and not the full amount owed in single payment. There could be various reasons, i.e. managing cash flows of the entity and yet wanting to meat the deadlines or simply negligence from their part. Continue reading