Cash basis customer, 2018 check

Hi there, @Mfgsolutions.

Thanks for joining us here in the Community. I'm here to help and share some information about writing off the customers' tax payment for 2018 in QuickBooks Desktop.

You can record the transactions for 2018 for received payment since the check was dated 12/31/2018 then post it under the Undeposited Funds. However, you'll need to have the Deposit to be recorded for January 02, 2019. When reconciling your accounts the amount will be included on your 2019 reconciliation. Your QuickBooks Records doesn't necessarily need to match the clearing date of your bank. Therefore, there's no need for your customer to write off the payment.

You can also, check out this article about the account receivable workflow in QuickBooks for your future reference: Accounts Receivable workflows in QuickBooks Desktop.

That should do it! You've got me here if there's anything else you need. I'll be around to help you out. Have a great weekend.

---

@BettyJaneB wrote:

You can record the transactions for 2018 for received payment since the check was dated 12/31/2018 then post it under the Undeposited Funds.

 

---

This is wrong.  The check date is irrelevant to the recipient. It's the date it was received that determines the Receive Payment date.  Note the word "Receive". And Undeposited Funds has nothing to do with this

---

@Mfgsolutions wrote:

My customer wrote a check for a machine invoiced in December 2018. Check is dated 12/31/18.  We didn't receive it until we returned on Jan 2, 2019.  Cash basis on both sides of the deal.  Can the customer write off the payment for 2018 taxes even though we didn't cash it until Jan 2019?

---

You date the receipt on the date it was received and the sender dates the payment on the date sent (not the check date - they may have dated it 12/31/18 and sent it same day on the 2nd).  I guess the IRS loses a bit but they'll get it back next year so no worries.

This makes no sense: "Cash basis on both sides of the deal."

You don't care about anyone else's Basis. You care about the data you are managing, not other company data.

"Can the customer write off the payment for 2018 taxes even"

You stated this is a machine. They seem to have bought a new Fixed Asset, not placed in service until 2019. That is an asset prepayment in 2018 and not a write off.

Or, your customer made this Sale, and the date of the Payment "Constructive Receipt" is when they opened the mail on Jan 2. Your perspective in the narrative is a bit vague for who Bought and who Sold.

Do you do taxes? You need to follow the tax regulations that apply.

"Your QuickBooks Records doesn't necessarily need to match the clearing date of your bank."

It should Never match, unless everything you do is electronic and settled the same date you did it. Everything in the one data file is Your One Perspective. Not the bank's and not the other company's mixed into it.