Let\u2019s say that you ship off goods to your client on December 15 and since they are delivered by the ship, the expected date of receive for the client is January 14. It\u2019s a long shipment and as such, one should always keep in mind the shipment terms. <\/p>\n
If according to the terms the risks and rewards (i.e. ownership) is transferred in a way that the client has to take care of the transport, the customs etc. the goods belong to the client as soon as they are put on the means of transport. Depending on the terms of delivery the ownership is transferred at the time the client is responsible for them.
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\nIt\u2019s also the moment you\u2019re entitled to recognize the revenue. Just up until this moment, you still own the goods and since the sale technically hasn\u2019t been made, you should not recognize any revenue and receivables. In your financial statements nothing else happens, but if applicable and needed, you charge an advance payment to your client. Other than that you may also send the client a pro-forma invoice which doesn\u2019t automatically create the revenue entries into your accounting, but is more for informational purposes so you\u2019d know that the shipment was made and that you could already send the client an invoice. <\/p>\n
So the fact that the goods were shipped off to the client in one period, isn\u2019t in essence reason enough to recognize revenue in the same period. You should always make sure what do the actual shipment terms used mean and follow the trail of ownership transfer. <\/p>\n","protected":false},"excerpt":{"rendered":"
Let\u2019s say that you ship off goods to your client on December 15 and since they are delivered by the ship, the expected date of receive for the client is January 14. It\u2019s a long shipment and as such, one should always keep in mind the shipment terms. If according to the terms the risks […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,39],"tags":[],"class_list":["post-2740","post","type-post","status-publish","format-standard","hentry","category-1-basic-accounting","category-1-11-revenue"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/2740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=2740"}],"version-history":[{"count":2,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/2740\/revisions"}],"predecessor-version":[{"id":2846,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/2740\/revisions\/2846"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=2740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=2740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=2740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}