Adding a sale to order book

Didn't find your answer?

We service our clients over a 12 month period. Recently some have asked to be invoiced early and I have been told to start the sale in my order book when I invoice and not when the renewal is due.

For example. XYZ limited booking runs from September 2023 to August 2024...which is accounted in my order book as sales total £12,000 divided by 12...£1,000 in each month September 2023 to August 2024. 

January 2024 they have booked for another year (Sept 2024 to Aug 2025). But want to be invoiced in January 2024 and not the normal September when their renewal is due and like we have done previously. When do I start this order in my order book...when I invoice? I am concerned about one client having two 'bookings' and how those would affect deferred income.

Replies (2)

Please login or register to join the discussion.

By David Ex
15th Jun 2024 09:19

I wouldn’t do anything that you haven’t discussed and agreed with your accountant.

Thanks (1)
By D V Fields
15th Jun 2024 11:01

You should establish the intended purpose of the Order Book. It would inter alia be to establish the percentage of forecast turnover covered by orders on hand. This may be by the year end resolution or by monthly resolution. You may then be factoring in the timing differences between physical invoicing and actual recognition in the account resulting from accruals and provisioning as may be needed.

Your Order Book reporting may facilitate, if say Excel based, smoothing of the invoice over or into the required periods. If it does then recognising on invoicing date is sufficient. If on the other hand the Order Book report is simply “as is” then you would want to allocate the invoice to its multi periods for the Order Book.

In general I would hope that recognising it on invoice date is the better method because it is more factual and you can allow for timing issues to be covered at a further stage by a better tool.

Thanks (1)