Ship Test

Last Updated: Jun 7, 2019

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Also referred to as an invoice test, a ship test is performed as part of an ABL Field Exam. The ship test compares the invoice date to either the Bill of Lading date or the delivery date, depending on the FOB terms of the transaction.  It is used to confirm proper revenue recognition, and the existence of a proper receivable which is ultimately being lent against. One example of a ship test finding, is what is known as a pre-bill. This is where the borrower invoices a customer (thus creating availability against this receivable), before the customer took ownership of the product (indicated by the date on the Bill of Lading). This results in an ABL lender advancing against a receivable they would not be able to collect.