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[Craig@Clarity]

I think you're blurring the lines between Accounting and Commerciality. You can recharge whatever the amount is and add VAT on top. If the contract says at "cost" then it's at "cost" plus 20% (whatever is interpreted as "at cost"). If the contract says 50% then it's 50%....

[Craig@Clarity]

It comes down to income recognition. I assume the product hasn't been delivered to customer A and since there is no sign off yet, I would gather there is no income recognition at that point. I'm thinking along the lines of the product being a piece of software like office 365.


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[Craig@Clarity]

Apply the percentage of the work completed to the fixed price and provide for it as work in progress (Credit Sales, Debit Work in Progress)....

[Craig@Clarity]

If you've delivered the work but have not received payment or invoiced yet then it would go in as accrued income or work in progress. If you've invoiced, then it goes in as sales and you pay CT on it. Either way, where there is billable work completed, you need to recognise that value and include...

[Craig@Clarity]

It still amazes me that agencies still get this one wrong. Your company incurs an expense whether there is any VAT on it or not. Let's say £100 plus VAT = £120
Your contract with the agency says you can "recharge" your expenses 100% to the end client. Therefore on your invoice you...