Noted that the Manager software creates sales invoice and recognises sales immediately when the sales invoice is created. However, based on accounting principles, revenue shall be recognised then the sales are completed, for example when the goods are delivered to customers or when the services are completed, and such dates are likely to be later than the invoice dates.
Is there any method to add a completion date and recognise the sales based on completion date instead of invoice date by Manager?
When revenue is recognized depends on two factors: whether you use accrual or cash basis accounting and date of issue of sales invoice. Both are under your control.
Thanks for the reply. I have chosen the accrual basics of accounting, so the sales will be recognised based on invoice date. However, to match accounting standard, sales need to be recognised based on completion date, i.e. date of delivery of goods or completion of services, which are often after sales invoice dates. So I wonder if the software can input sales completion date and recognise sales based on completion date rather than invoice date.
Currently the sales are recognised based on invoice dates and do not reflect the actual performance of the business. Although I can do adjustments periodically, it requires manual effort and the true business picture can be reflected on the dates that the adjustments are done only.
So I just wonder if there is any method to resolve this? Thanks!
There is no method. If you are concerned with following accounting standards, you should not issue a sales invoice until the economic activity is substantially complete and you can determine the amount due with reasonable certainty. This does not have to be after delivery; it can be upon shipment, depending on terms of the contract or sales agreement.