Try this scenario:
I have been doing accounting since 1957 when I went to work at Kroger Divisional offices at age 17-—just out of High School.
I went out on my own doing accounting for small businesses in 1980. I am now 82 & I still have ONE client-—this is the 52nd year I have done his books.
I know that a company of any size follows these accounting stages:
A purchase order is agreed to in writing, between manufacturer or wholesaler & retailer, including items numbers, quantity, terms of payment, and agreed delivery to purchaser in salable shape...not damaged or rotten if perishable.
In the normal flow of things, those shipments arrive, are opened up, checked for items, quantity and condition against the packing slip enclosed in the retailers warehouses.
The items go into inventory if no problems.
The packing slip is forwarded to Accounts Payable to match the purchase order, packing slip, and INVOICE & authorize payment according to the payment terms.
IF there is a discount for quicker payment, that is noted & set up for payment accordingly.
NOW:
Items are ordered & from there on, it is a CRAP SHOOT.
Customers do NOT have their goods-—they do not have a packing slip to collect together with all other necessary papers to PAY the invoice.
The manufacturer or wholesaler is NOT getting paid-—
They are stuck -—items they shipped they cannot get paid for.
The customer doesn’t have inventory to sell-———yet they ordered such in good faith and cannot seek out many other sources for replacing tardy orders.
IF it somehow ALL comes in, then they have an over abundance of inventory & a flat bank account.
The Customer doesn’t have funds from those sales to PAY the bill for the goods.
Any agreed to discounts for prompt payment are lost because the goods are SOMEWHERE on a ship & cannot be received & sold.
This is a total Accounting NIGHTMARE......
I have worked in Accounts Payable departments that handled many thousands of pieces of paper & had to pay bills on time to keep getting the best terms. I am not talking about Mom-Pop stores-—I am talking about major companies like Kroger/IGA/Universal Studios, etc.
It will take MONTHS after the ‘supply chain’ is running smoothly again to see daylight on all the problems.
Meanwhile, Biden & Butt Boy cannot operate a flea market on a small island.
Try it I am living it. Not only is the accounting part of this a nightmare but If I aint shipping I aint selling. I have to guess at what I need that I won't get delivered. I have the orders but not the stock.
Depends on FOB term. What you describe is common, but FOB shipper’s dock is also common. Buyer owns the goods when they leave shipper’s dock.