I was thinking that it can be very useful for us to link a liability for an anticipated payment for purchasing an inventory item to the item itself without altering in any way the inventory (quantity and amount).
We currently use special accounts to allocate these liabilities to the customers.
How would you do it?
Can you explain further? Why do you have a liability to a customer for an expected purchase of inventory—which would be from a supplier?
Sorry… for purchasing I mean a Client who is purchasing from my company: so it is a sale from my Company by a Client with an anticipated payment.
I see two possible scenarios.
In the first, you may strongly expect the customer to eventually purchase your inventory item—to make a sale. You may plan on the sale. Indeed, the survival of your business may depend the sale. Your forecasts may include the sale. But there is no guarantee and, therefore, no accounting transaction to record.
In the second, there is some form of contractual guarantee that the customer will consummate the sale. Therefore, the customer’s obligation to purchase is an asset. I see no reason not to issue a sales invoice at that point, with the inventory item as the line item. In this case, you cannot sell the inventory item to someone else. The receivable would correspond to your anticipation of receiving the customer’s money. A suitable due date would be assigned. Delaying a delivery note until the sale concludes would keep the item in inventory.
Special accounts could also be a means of holding such assets. But I do not see that as being functionally different from holding the asset in Accounts receivable, except for the extra visibility. I might do that if there are other transactions in the customer’s account. But if this is the only transaction, I do not see any purpose. It would just create a need for journal entries to move things around, only to end up in the same place.
I might be missing some nuance of your situation. But to my simplistic brain, the question is whether or not you should recognize the revenue, not whether the payment is current or anticipated at a future date. (I suppose anticipating a distant future receipt would be an additional argument for segregation in a special account.)
This is closer to my scenario but with many distinguo. I must premise that we are talking about real estate. So we have a preliminary purchase agreement with advance payment and a deed with the closing payment.
By law, at least in Italy, we must:
Each apartment is a distinct inventory item or better a distinct inventory kit.
As I can extract with a custom report all the inventory kits (with all their additional data stored in custom fields) that were sold, I would like to do the same for the ones subject to a preliminary purchase agreement that are still not sold. That’s why I would like to link the kits to the invoice for the advance for the preliminary purchase agreement.