I receive “blanket PO’s” regularly which have multiple scheduled deliveries of product. These scheduled deliveries are frequently qty:XX each month for a full year. So, my purchasing department buys piece parts for the full contract quantity to take advantage of lower piece part pricing for these higher quantities. This results in me having inventory of piece parts, which we assemble and ship product per the delivery schedule.

Technically, this inventory is sold goods which are scheduled to ship, collecting payment 30 days after shipment. (NET 30 terms). I don’t look at this inventory as unsold goods, I.e. “Holding inventory”

I currently have 2.44M in unassembled and un-shipped “inventory” (cost of goods) for this year.

My problem is that I’m seeking a line of credit to expand the business, however the bank is looking at that 2.44M in unassembled product as “inventory” not recognizing it as technically sold product.

Can someone provide me with terminology explaining that “inventory “ as on-contract sold product, and not as a depreciating asset or even as a liability?