Issue invoices in different months but revenue account stay in 1 month

most likely the issue is the report basis

Cash basis, income is reported when received

accrual basis, income is reported when the invoice is saved

the other aspect is the deposit invoice, if it the full amount and you ask that 50% be paid, then the full amount is posted as income under the accrual basis reporting

Thank you Rustler

I would like to give you an example to see if what you advised can be applied in my case

- Customer confirmed order in 10 Jan and we issued an invoice of 50% of the total amount for customer on the same day (this is non-refundable, so we don't call it deposit because at the same time we have to pay the vendor)

- On 15 Feb, factory completed the order and we ship it to customer. We issue 2nd invoice of 30% of total amount on 15 Feb 

- When the vessel arrive at destination, let's say on 15 Mar, we issue the 3rd invoice to collect the remaining amount 

Since we also have to pay vendor on 10 Jan, costs occurred in Jan and the whole revenue should be recorded as whole in Jan as accounting principle. 

Is there any way to do it?

Thanks

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@Anonymous wrote:

Let me join in, Tran Level 1.

 

If you want to show the income and expense when the contract was signed, you can set your reports into accrual basis of accounting. This would recognize your income and expense on the day you’ve created the invoice and bill.

 

Here’s how to set your reports into accrual basis:

1. Click the Gear icon at the top.
2. Select Accounts and Settings.
3. Choose Advance from the left panel.
4. In the Accounting section, click the pencil icon.
5. Select Accrual on the box next to Accounting method.
6. Click Save and Done.

Stay in touch if there’s anything else you need.

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Has NOTHING to do with his question

again!

Thanks both

Rustler address my issue. I did accrual reporting. But as you said, there is no way I can issue the official invoices. I can do estimate or pro forma invoice, but not sure customer accepts it. 

Hope QBO will develop this feature one day.

I know this is marked as solved but I wanted to add a point, partly in case it's been missed, and partly in case I'm missing something!

@Rustler said:

> Cash basis, income is reported when received

> accrual basis, income is reported when the invoice is saved

Which makes clear the distinction between two key dates: 

1. The date of the invoice (which itself can be subject to some debate)
2. The date payment is received

And yes, in general with Cash accounting, revenue is recognized on the second of those, whereas in Accrual accounting, revenue is often recognized on the first.

However, my (non-accountant) understanding is that while the above happens to be the case by default specifically in QuickBooks, in fact it is not necessarily so in general. My understanding is that there are at least three important points in time, not just the two mentioned above. They are:

1. The date payment is received
2. The date of the invoice, BUT ALSO
3. The date the revenue is recognized

And crucially, 2 and 3 do not have to be the same thing, even in accrual accounting. In fact from a purely technical point of view -- i.e. ignoring things like GAAP -- 2 and 3 are entirely independent of each other. When, how often, and by how much one invoices your customers is entirely separate from when, how often and by how much one recognizes the revenue coming from those customers.

Of course, to have that flexibility one must not be using Cash Accounting; Accrual is required. But once that decision is made, it is still necessary to then decide exactly how to recognize revenue. Yes, in QuickBooks, we can just allow the default to happen -- namely, recognize revenue on the invoice date. But that is only one of several options and, depending on your business, may often not be the correct option.

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@tkelly_uk 

In order to recognize revenue at a different date than the default, you have to use an item that purposely posts that revenue to a deferred income account (liability).  Then at some point in the future you recognize that deferred revenue as income, moving it out of the liability account and into income.

so that aspect is a procedural one you may or may not employ in your business.  Absent that intentional redirection of revenue, the default is in play

QB is accrual accounting, it only reports on cash basis, there is no such things as cash accounting in QB.

For us, we are on accrual basis, we provide a service each month and we bill for it when the month is over. For January we would typically create the invoice on or after February 1st. When we collect, it is attributing to February and not January. So are you saying if I create the invoice in January and do not send  officially until February, it will be allocated to January where I want it? Or, is there something else we should be doing. Thanks for any help