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What should be the Invoice timing??

Zulfiqar Ali's Profile

Help is needed...
I wanna know that what should be the proper timing of producing the invoice?

1. Once the supplies leave the factory premises?

2. Once the supplies are received by the customer??

Moreover, effect on credit limit, aging reports, unearned revenues and most importantly considering IFRS 15.

Please help...


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

You should invoice once the supplies leave the factory. That is the date the transaction has occurred.

In reality, your customer is not going to pay you until they receive the goods + terms.

You need to adjust your aging schedule accordingly, based on average time your goods are in transit.

Zulfiqar Ali
Title: Assistant Manager Receivables
Company: General Group
(Assistant Manager Receivables, General Group) |

Once the supplies leave the factory...till now I have been doing this, and started to face complaints from distributors about credit period,
However when I wanted to change it until goods are received by the customers as we also have tracking team, but the senior management forced me back to the old practice,
It just increases the work load about unearned income and than realising once the goods are received.

I'm just afraid If external auditors pose questions about this, and what I'm gonna say?

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

Why are you calculating unearned income? What are your FOB terms? Make them Shipping Point, then you have no issues...

Steve Sheridan
Title: Associate
Company: Dean Lewis Associates
(Associate, Dean Lewis Associates) |

I think if the distributors are complaining, you should take a look at how much credit you give them and perhaps scale back their credit limit. The merchandise probably takes 3-7 days to get to the destination. If your terms are net 30, that gives them at least 23 days to pay. If that extra 7 days is a hardship on them, it shows you they are having problems with their customers paying on time and they do not have money in the bank to cover their purchases.


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