Lesson 02 · Pricing and invoicing
The first invoice is never the last
Provisional and final invoices, how each is recorded in the books, and why a deal stays open until the final one.
Transcript
A ship leaves port full of coal. Its price depends on how well the coal burns, and nobody knows that yet.
So the seller sends a first invoice for most of the value. It's called a provisional invoice.
In the books, both sides record the deal when the coal ships, at a best estimate of the final price.
Weeks later, a lab tests the coal. It burns a little weaker than promised, so the price comes down a little.
Then a final invoice settles the difference, and only then is the deal done.
In the books, the final invoice isn't a new sale. It only records the difference.
The mistake to avoid: treating the first invoice as the end of the deal. Until the final invoice, the deal is still open.
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