Field notes
Cut-off mistakes that trip up trading firms
Goods in transit and bill-and-hold arrangements create year-end noise. Here is how to document ownership so the numbers hold.
Trading companies often recognise revenue when the invoice is raised, even if title has not transferred. Auditors test shipping documents, Incoterms, and subsequent returns. If your warehouse team cannot produce a dispatch note for a December invoice, expect a proposed adjustment.
Bill-and-hold arrangements need written customer instructions, segregation of goods, and evidence that the customer accepted the risk. Without those, the sale may belong in the next period regardless of invoice date.
A practical habit: reconcile open sales orders to inventory locations in the final three business days of the year. Capture photographs or system screenshots when physical segregation matters.
Purchases deserve the same discipline. Goods received notes dated after year-end should not sit in prepaid expense without a clear story. Match GRNs to purchase orders before the books lock.