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Management Accounts Invoice

Invoice payment Terms

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In short I've a 400'000 invoice, which I've great payment terms on. 20% upfront 50% 90days 30% 120days. However my account has treated the invoice as a whle cost in the last quarter and its resulted in my accounts looking awful as I'm not posting a loss for the quater. Which simply isn't the case. Can anyone help please?

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24th Oct 2018 13:29

Have you asked your accountant? (I'm assuming that when you refer to account treating the invoice as a whole you mean accountant.)

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to lesley.barnes
24th Oct 2018 14:09

Yes.

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24th Oct 2018 13:39

What was the invoice for? Goods? If so, were all the goods delivered in the quarter? If so, were they all used or sold in the quarter? If not, were they included in stock at the end of the quarter?

The payment terms are irrelevant. It’s the answers to the above questions that are relevant, if it’s an invoice for the purchase of goods.

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to johngroganjga
24th Oct 2018 14:11

Yes Goods, no not all delivered yet. Some sold sporadically during this quarter and into the next quarter.

Yes its a supplier invoice for goods.

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to Phillip O'Brien
24th Oct 2018 14:37

The goods should be matched to the period in which they're sold. Your accountant should have included unsold goods as stock, which would negate the impact on the P&L.

Perhaps there is a reason they haven't done so though, you should talk to them about it. You're the customer, they make the accounts for your benefit and when required should be able to explain them to you.

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to Duggimon
24th Oct 2018 14:49

Thanks

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24th Oct 2018 13:57

Not such "great payment terms" if it's resulted in a loss, eh?!

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to Accountant A
24th Oct 2018 14:12

? Thanks

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24th Oct 2018 14:38

The problem is you need to account for the goods as they come in and also take stock.

Unless you do that, which may or may not be a lot of work, your accounts won't be right.

Obviously, only you can decide whether it's worth the effort.

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24th Oct 2018 18:29

If it’s for something that will be consumed / used in the next quarter or for longer period. You could you prepay the invoice over this period, meaning release the costs to the P&L accordingly, so it hits your Balance Sheet.
Hope it helps.

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to julyaugust
24th Oct 2018 19:00

That’s called stock (this is a purchase of goods) not a prepayment.

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