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How to apply current transactions to previous year

I invoiced a client in late December 2018 but the payment only arrived in January 2019. I have also paid materials and subcontractors in early 2019 for that project. I have created a project with the 2018 invoice attached as well as the corresponding expenses (materials and subcontractors). I haven’t reconciled 2019 yet. I want the whole project to be applied to 2018 only. How can I make sure this whole 2018 project (income and expenses) does not show under 2019?

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QuickBooks Team

How to apply current transactions to previous year

Hi there,

 

It's vital you're able to apply your transactions the best way possible. Don't worry, I'll be happy to steer you in the right direction. 

 

Whether your 2018 transactions will show up under 2019 depends on your accounting method. The reason I say this is that the accounting method you choose determines what's considered as income/expense and at what stage. There are two types of accounting methods in QuickBooks Online; Accrual Basis and Cash Basis. 

 

Accrual basis

  • In this accounting method, the time when you enter a transaction and the time when you actually pay or receive cash may be two separate events.
  • An accrual basis report shows income regardless of whether your customers have paid your invoices and expenses regardless of whether you have paid all your bills.

Cash basis

  • A bookkeeping method in which you regard income or expenses as occurring at the time you actually receive a payment or pay a bill.
  • A cash basis report only shows income if you have received cash and expenses if you have paid cash.

Knowing this info, you can now select which accounting method works best with your business. You can edit this by clicking the Gear icon > Account and Settings > Advanced Accounting method to Cash Save).

 

In case you need further assistance, feel free to contact our support team using this link here