Goods Issue date VS Goods Delivery date

[xostas]

Hello,

Can a supplier invoice a customer based on Goods Issue date (Date when the goods left the warehouse) instead of Delivery Date? (Let's say that Lead time is around 4 days)

Can a customer refuse to pay based on goods issue date because the goods were delivery several days later and pay based on delivery date? (payment terms would be applied by customer 4 days later based on specific lead time)

Thanks,
Francisco

 

[SBlundell]

No business is legally required to provide any credit terms whatsoever. Whatever credit agreement you come to with the supplier is between yourself & them, be that based on issue or delivery or the next blue moon .

However, most businesses will have standard terms which they would expect their customers to abide by - generally by placing orders & commencing business with the supplier you have implicity agreed to their terms. Obviously I don't know what you do but presumably your sales terms are relatively standard to everyone?

Obviously you have every right to approach them with an alternative offer on their credit terms, but they have no obligation to accept anything at all. They could happily refuse any credit & require cash before dispatch in which case is 4 days such a problem?

 

[xostas]

Thanks SBlundell

4 days are not very important only if we are near month end. The supplier can load on 30 or 31 and deliver on the 2,3,4 of the next month. This in some cases depending on your company structure might cause issues. You raised your invoices in August as you take Goods Issue as invoice date and the customer will take September date in their system because they consider Delivery Date. if you add month end resumes to this you might have a drift of 30 days

 

[SBlundell]

No problem.

I'm not sure I follow quite how you got to the 30 days though (might be being a bit thick I accept )?

If you're talking in accounting terms (for management accounting or whatever) you should be matching goods with invoices anyway - any goods you've received at the end of the month for which you haven't yet been invoiced you would accrue for. Here you have the inverse - you'd probably 'prepay' the invoice values until you receive the goods (or account for their stock value even though you haven't physically received them yet - goods in transit).

Or are you talking about the timing of back-to-back invoicing to your customers?

I'm confused :|