sharing sales invoice income across several months.

I've got a way you might consider doing, kline.

QuickBooks Online has a Progress invoicing feature that lets you split into as many invoices as needed. You'll have to turn this feature on. I'll show you how:

1. Go to Settings and select Account and Settings.
2. Select the Sales tab.
3. In the Progress Invoicing section, select Edit ✎.
4. Select the Create multiple partial invoices from a single estimate checkbox.
5. Select Save and Done.

Once done, you can now create multiple invoices. To learn more details about the process, please check this article: Set up and send progress invoices in QuickBooks Online.

Know that I'm always here to guide you if there's something else you need help on this process. 

Thank you. We don't use QuickBooks to do our estimates so I don't think that would work for us. The invoices have already been issued, eg for an annual service contract.

Hello kline, So you would like to show the payment off the invoice in 12 monthly payments? One option would be you could set up a recurring journal entry to the bank account on one side of the journal and the debtors on the other side entering that customer's name and it will reduce the debt and increase the bank monthly. Are you cash or accrual for your accounting? 

Hi Emma,

I'm using accrual accounting. The customers are invoiced for and pay for the annual contract in one lump sum. My manager wants the income in the management accounts to be spread across the months the support contract is for. I'm thinking journals with transferring the income to Prepaid Income then transferring one month back at a time but I'm not sure if this is the easiest/best way of doing it? And do I do this for each invoice or at the end of each month?

Hello Kine, with you being on accrual it will record that as income as soon as the invoice is created for the full amount, Are you looking to create an asset for the full amount and then reducing it monthly as you pay amounts off the invoice? Do you want this to show on the balance sheet?

Hi

I'm not quite sure what you mean.

Hi kline, thanks for getting back to us. When you raise an invoice on an accrual basis, the income will post to the reports such as the P&L on the invoice date, therefore as a lump sum rather than split between the individual months of payment. Are the monthly management accounts set up as income accounts within the Chart of Accounts?

Can we also check if the invoice itself paid for by the customer in full at the start of the year when the invoice is issued, or do they pay in installments? 

Thanks!

Hi Georgia

Thanks for your reply.

The customers pay in full at the start of the year. The monthly management accounts are not set up as income accounts within the Chart of Accounts. I know how to set up new accounts within the Chart of Accounts but I'm not sure how I would set up and use the monthly management accounts in QuickBooks. Is there a tutorial video or post for this please?

I have found this post Solved: Re: Billing up front for a few months work (intuit.com) I think this is what I need to do.