Finance manager should spend a good amount of time on understanding the contractual obligation. Don’t take thing for granted that previous finance manager would have reviewed through all the language behind the contract. You would be surprise to see the amount of issues you find through deeper.
Here are few contract you need to make sure you request frequently:-
- Building lease or rental.
- Transportation, Insurance and delivery term – this will impact revenue rec.
- Customer sales contract – this will impact operating margin
My advice – Read the contract together with finance reporting standard this goes hand in hand to make sure the accounting of this contract is properly accounted.
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