Field notes
Year-end cut-off errors we still see in Shikoku trading houses
Revenue booked a day early, freight left in transit, and the quiet cost of closing the books before the trucks arrive.
2 April 2026 · Ren Takahashi
Cut-off is unglamorous work. It is also where many regional trading houses lose days during audit fieldwork. The pattern is familiar: sales recorded when the invoice is printed, not when control of the goods transfers; inbound freight still on the water but already in inventory; returns accepted in January booked against December revenue with no reverse entry.
Match documents, not hopes
Pull the last week of shipping advice notes, bills of lading, and customer acceptance confirmations. Compare them to the sales journal line by line. If acceptance sits with the customer under FOB destination terms, an invoice dated 30 December does not automatically belong in December revenue.
Freight in transit needs a home
Goods purchased FOB shipping point may belong on your books even while they float toward Kochi. Goods purchased FOB destination may not. Mixing the two without a clear policy creates inventory that auditors will challenge with bank confirmations and vendor statements.
Close the period once
Reopening December after the first draft trial balance invites new cut-off mistakes. Assign one person to own post-close adjustments and document every entry with the supporting shipping or receiving proof.
A clean cut-off does not make the audit shorter by magic. It does remove the late-night scramble that turns a two-week engagement into three.