'Bill And Hold' Arrangements 7 / 8

'Bill And Hold’ Arrangements

A form of sales arrangement in which a seller of a good bills a customer for products but does not ship the product until a later date.

Revenue is normally only recognised when goods are shipped to the buyer.

All of following criteria must be met before a bill and hold transaction will be allowed:

  • The risks of ownership have passed to the buyer

  • The buyer has committed in writing to buy the goods

  • The buyer has requested that the seller hold the goods, and has a business reason for doing so

  • There is a scheduled delivery date for the goods that is reasonable

  • There are no remaining obligations that the seller must complete

  • The goods cannot be used to fill orders from other customers, and so have been segregated

  • The goods must be complete