Dictionary / Bill of Lading
What does Bill of Lading mean in accounting?
Quick definition
GeneralCarrier's written document constituting a receipt for goods shipped as well as a contract to deliver the goods in a specific manner. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
Read more below
Examples
Signing for a hardware pallet at the dock
You run a hardware store. On March 19 a freight truck delivers a pallet from a hardware supplier, and the driver hands you a bill of lading listing 12 cartons, 340 lb, and collect freight. Signing it is the carrier's receipt that those cartons arrived and the contract to have delivered them that way; do not enter a vendor bill from this paper. Enter that supplier's $1,890 invoice to inventory and accounts payable, and code freight-in from the separate freight bill. If a carton is crushed, note the shortage on the bill of lading before the driver leaves.
A freight pickup is not the customer invoice
On August 22 your millwork shop tenders a $7,280 reception desk to a freight carrier for a dental-office client in Phoenix. The driver issues a bill of lading for one crate, 890 lb, prepaid. That paper is the carrier's receipt that the desk left and the contract to deliver it as listed; it is not the customer's invoice and it does not create accounts receivable. Book the sale from the invoice and your FOB terms, and file the bill of lading with the job. If the crate arrives damaged, the claim starts from this paper.
Why it matters
A bill of lading is the carrier's receipt for goods and its contract to deliver them a certain way, not the seller's invoice and not a bill of sale. You will not handle one most months unless you regularly ship or receive freight; it shows up when a trucker or freight line picks up or drops a shipment. Book payables or sales from that paper and you post from a document with no price or payment terms. Keep the signed copy with the shipment file so you can support inventory cutoff, freight claims, and FOB timing, and post the dollars from the invoice and the freight bill.
Further reading
Compare this term with reference material from other accounting and finance websites.
Keep learning
Start with the bookkeeping basics, then compare software when you are ready to pick a tool.
Getting startedBookkeeping basics for small-business ownersWhat bookkeeping is, the records you need, double-entry in plain English, and a monthly rhythm that fits a 1–50 person shop.Updated October 4, 2026
RolesWhat does a bookkeeper do?A bookkeeper records bills, invoices, and bank activity so your books stay current. See the weekly work, the month-end close, and what they do not do.Updated August 18, 2026
Monthly closeMonthly bookkeeping: what to close each monthMonth-end is the job: reconcile banks and cards, age bills and invoices, check payroll, then read the reports. A close checklist for small-business owners.Updated August 18, 2026
Startup BankingThe 5 Best Banks for EU StartupsThe 5 best banks for EU startups, ranked: Wise Business, Revolut, Qonto, bunq, and Finom compared on fees, deposit protection, and honest tradeoffs.Updated August 9, 2026Frequently asked questions
What is Bill of Lading in bookkeeping?
Carrier's written document constituting a receipt for goods shipped as well as a contract to deliver the goods in a specific manner.
When should I use Bill of Lading?
Use Bill of Lading when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with Bill of Lading?
Bill of Lading is used for bill of lading entries, while Bad Debt covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.