We didn't write the synopsis for Broken Toys: China's Song until some time during the second draft and we were wanting to send it out to publishers. Most publishers will want to see a synopsis and three sample chapters. Trying to distill an entire novel down into a one-page synopsis was difficult. Brevity is not something I do well.
When we finally did manage to compress the plot points to a single page, I found myself thinking, "Should I have made this a children's book and figured out some way to get pictures?" In retrospect, I think I was more able to fully flesh out the characters and bring more meaning by writing a full novel. However, the process of writing the synopsis brought out several things to me, so I suggest that you consider writing the synopsis as soon as you have the basic plot and characters in place.
First, it's a good idea to put on your marketing hat before you spend a lot of time on something. If you aren't going to be able to put together a decent synopsis, you're going to have a difficult time selling your work. So, you may want to move on to something more marketable.
Second, you need to be able to distill your message down to a page. Really, you want to be able to say in a sentence or so what your book is about. This should give your work some focus. Also, if you meet a publisher or agent at a conference you can blurt out something like this:
"I'm writing a book about how God is in the business of fixing hurt and broken people. I use broken toys and a kind toymaker as an allegory to show how much God cares for us."
Hopefully, that will elicit a "Tell me more" response.
Third, looking at the synopsis should give you a fair idea about the length of the finished product. You should always try to tell your story in as few words as possible, without losing the depth of the characters or the meaning. Of course saying that is much easier than doing that.
JK Rowling's later books were famous for their high page count. Ironically, one of the great things about Harry Potter and the Sorcerer's Stone is that it sets up the entire Wizarding world in Just over 300 pages. She wastes very few words and almost every scene is important.
One of the reasons A Christmas Carol has had such staying power is it tells a very engaging story in so very few words. After all, when's the last time you saw the Great Expectations Christmas Special?
Finally, reviewing your synopsis should tell you if you've left anything out. This is especially important for non-fiction.
So, what has the process of crafting a synopsis taught you?