How to Record Performance Based Payments
Recording the receipt of performance-based financing which is not considered revenue until liquidation.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash | Debit | 100,000.00 | - |
| Performance Based Payments (Liability) | Credit | - | 100,000.00 |
💡 Accountant's Note
Performance Based Payments (PBPs) are contract financing payments. They are recorded as liabilities until the associated items are delivered and the payment is 'liquidated'.
Practitioner & Systems Framework
💻 ERP Architecture
Track as a contract-specific liability account to ensure proper liquidation against future invoices.
⚠️ Audit Flags
Discrepancies between physical progress milestones and PBP requests.
📄 Required Documentation
Verification of milestone completion signed by the Contracting Officer or designated representative.
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Discussion & Community Questions
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