Front end loading

Front end loading is the practice of charging most of the fees associated with a project at the beginning of the transaction. This is especially common when the seller needs the funds to purchase materials prior to the start of work. However, the amount paid by the customer does not necessarily align with the amount of revenue that has been earned, so much of the early charge may be initially recorded as a liability of the seller. This approach reduces the risk of customer default for the seller, since most of the payment has taken place before work begins.

Related Courses

Project Accounting 
Project Management