{"id":4750,"date":"2014-02-19T07:42:15","date_gmt":"2014-02-19T05:42:15","guid":{"rendered":"http:\/\/www.officetodo.com\/public\/?p=4750"},"modified":"2014-02-16T07:43:19","modified_gmt":"2014-02-16T05:43:19","slug":"when-should-i-recognize-my-sales-revenue","status":"publish","type":"post","link":"https:\/\/www.officetodo.com\/public\/when-should-i-recognize-my-sales-revenue\/","title":{"rendered":"When should I recognize my sales revenue?"},"content":{"rendered":"<p><span style=\"font-size: medium;\"><span style=\"color: #000000;\"><span style=\"font-family: Calibri;\">When you\u2019ve transferred the risks and rewards according to agreed delivery terms, that\u2019s when you recognize your sales revenue.\u00a0<!--more--><\/span><\/span><\/span><\/p>\n<div><\/div>\n<p><span style=\"font-size: medium;\"><span style=\"color: #000000;\"><span style=\"font-family: Calibri;\">An excuse that we\u2019ve agreed on sending invoice when the other party has confirmed the delivery is complete or that we\u2019ve agreed with the client, we\u2019ll send the invoice when the ship company has confirmed the goods are on board and we\u2019ve confirmed this confirmation with the client and after which we\u2019ve also sent out an invoice \u2013 does not matter! It\u2019s all about the terms of delivery that you\u2019ve agreed with your client. Why even agree on them then? Maybe agree on something else then so that it\u2019s meeting on what\u2019s actually recognized in accounting.<\/span><\/span><\/span><\/p>\n<div><\/div>\n<p><span style=\"font-size: medium;\"><span style=\"color: #000000;\"><span style=\"font-family: Calibri;\">Imagine, you agree that you\u2019ve transferred the risks when the goods are put on board a ship and yet you recognize sales when you\u2019ve sent out the invoice for the sale or even when the goods are delivered at the client\u2019s site. You agree on terms of delivery for a reason \u2013 to manage your cash flows for an example and then you go about and ignore on what you agreed with the other party.<\/span><\/span><\/span><\/p>\n<div><\/div>\n<p><span style=\"font-size: medium;\"><span style=\"color: #000000;\"><span style=\"font-family: Calibri;\">Sounds silly, right?<\/span><\/span><\/span><\/p>\n<div><\/div>\n<p><span style=\"font-size: medium;\"><span style=\"color: #000000;\"><span style=\"font-family: Calibri;\">My suggestion:<\/span><\/span><\/span><\/p>\n<div><\/div>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Calibri; font-size: medium;\">&#8211;<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<span style=\"font-family: Calibri;\"><span style=\"font-size: medium;\">Gain an understanding of risks and rewards;<\/span><\/span><\/span><\/p>\n<div><\/div>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Calibri; font-size: medium;\">&#8211;<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<span style=\"font-family: Calibri;\"><span style=\"font-size: medium;\">Gain an understanding about the terms of delivery;<\/span><\/span><\/span><\/p>\n<div><\/div>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Calibri; font-size: medium;\">&#8211;<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<span style=\"font-family: Calibri;\"><span style=\"font-size: medium;\">Recognize revenue based on the agreed terms not something else.<\/span><\/span><\/span><\/p>\n<div><\/div>\n<p><span style=\"font-size: medium;\"><span style=\"color: #000000;\"><span style=\"font-family: Calibri;\">At the end of the day it\u2019s your goods you\u2019ve got overstated, your sales revenue and profits understated on the financial statements.<\/span><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When you\u2019ve transferred the risks and rewards according to agreed delivery terms, that\u2019s when you recognize your sales revenue.\u00a0<\/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-4750","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\/4750","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=4750"}],"version-history":[{"count":2,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4750\/revisions"}],"predecessor-version":[{"id":4752,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4750\/revisions\/4752"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}