Hoping someone can help. My company bills 30 days in advance of service so an invoice going out on 9/1/21 is for service 10/1 - 10/31. We currently use the service date as the revenue recognition date so our journal entry on invoicing is:
DR Accounts Receivable
This occurs on 10/1 but the invoice was sent on 9/1 so some customers have already paid before the invoice is "live".
This creates negative AR :(
Has anyone had a similar situation and found a method for invoicing so the AR is correctly recorded on 9/1 and the revenue is deferred until 10/1?
If you send an invoice and you get paid for it, revenue will be recognized on your financial statements, either on the invoice date (accrual) or the payment date (cash), or the invoice date if there is a pre-payment (cash or accrual). There isn't any way around that.
In your case I think your invoices should be dated at the beginning of the service month, as that is what they are for (you won't earn the income until then, and your customer knows - more or less - that if they cancel their contract you won't be expected to and they won't be expected to pay.)
If you must send them early, you can create a custom field on the customer list and then add it to the invoice, name it something like "Billing Date", and enter the billing date (9/1 in this case) in the field, but use 10/1 as the actual transaction date.
You can then use the invoice layout designer to position the field as needed, next to or in place of your internal transaction date.