Fiscal-Year Cutoffs and Preseason Deliveries: Avoiding the Budget Gap Between Order and Invoice

Questions and answers

Which year’s budget pays?

Some organisations charge the year of order, some the year of delivery and some the year of invoice. Ask which applies.

Can the money carry over?

Some budgets allow encumbrances or carry-forward, and others do not. Ask what happens to unspent funds if delivery is late.

What if the supplier invoices on shipment?

Ask whether an invoice for goods still at sea or in a warehouse can be paid, and in which period.

What does a purchase order promise?

Ask finance and procurement what the purchase order commits and what it does not, including how a delay is handled.

How does the timeline look?

Write down the key dates: order, expected production, shipment, arrival, inspection and invoice. Compare them with the fiscal-year dates.

What if delivery slips?

Agree in advance what happens: a revised delivery, a cancellation, a re-order in the new year, or an alternative source.

A checklist before ordering

The budget year, not the season, decides when an order has to land.

• [ ] Fiscal year end date confirmed.
• [ ] Finance has confirmed in writing which year’s budget pays.
• [ ] Delivery date in the order is realistic, with a buffer.
• [ ] Plan for delay agreed with the supplier.
• [ ] Receiving and inspection dates set.
• [ ] Invoice terms checked against the cutoff.

Limit

Rules differ by organisation, law and funding source. Use this list to ask questions, not to answer them.

A timeline to draw

Draw a simple line with the fiscal year end on it and mark each date in the order process. Where the order, delivery or invoice falls on the wrong side of the line, circle it and ask finance what happens. A picture often makes a conversation shorter.

Boundary: This is not accounting or legal advice; fiscal-year, encumbrance and carry-over rules differ by organisation, law and funding source.