@ThanksInAdvance
invoice = I need to enter that the Charges are of this date, but are Unpaid, as of this date. The Payment is a separate transaction, with its own date, that follows later and/or in partial amounts. This is Accounts Receivable = I am going to receive the payment later = Two Steps.
Sales Receipt = for the Date of this activity, I also am Paid = One Step.
Both are Sale Transactions where you list customer name Charges. The accounting for what that charge is doing, is controlled by what you listed. You listed it on the Transaction Type that reflects which condition applies:
Paid later, for this date <== Invoice
Paid already for this date <== Sales Receipt
"If this is a liability (which i understand that it is)"
For a Landlord and a Law Firm, prepayments meet their requirement for Trust Fund accounting.
"you record this with a sales receipt as opposed to an invoice (BTW why couldn't you record as invoice?)"
You use what applies for when you are being Paid relative to the date. Example: A landlord uses Month End invoices, and the Payment is supposed to Terms Net 5 = rent paid by the 5th of the new month or it is considered Late. They don't Send the invoice; it is their Tracking transaction.
"Then is there a reason this still shows up on Item Profit Detail report - shouldn't this $1095 not be seen as "profit"?"
For any report, you control the Filters. For instance, for Job Profit reports, they start out filtered on Account = all income/expense. For the Item Profit reports, they start out filtered on all Sales items.
You need to make your own Filtered reports, retitle and Memorize them. Example:
Item "profit" really is Item Activities. If you don't want Balance Sheet accounts, then change that Filter for Accounts = all income/expense only. I prefer to use an Other Charge type item for Prepayment management, so that I clearly see they are not related to sales or charges for goods and services, and I want to see them on this reporting, to keep an eye on the Activity.
For Sales Reports and Job reports, for a trust account activity, I make a custom transaction report, filter on Account = the Liability account, set it to Total By Name, and rename it Customer Prepayment Balances - All Activity. When a name is at 0, you reconcile the liability account using only and always the ending balance of 0. You are going to clear Only the names' activity where that name is at 0 on your All Activity report. Once you finish that first reconciliation, open your All activity report. Filter on Cleared Status = No. Retitle this as Current Balances and memorize as New, not replace. Now you use this report to manage Liability Balances, to prevent Over-refund, for instance.
For Job reports, when the job has all WIP items, you need to customize and remove the Accounts Filter entirely, to see your WIP activity, such as a Property Flipping operation.
My Favorite report is Sales by Customer Summary, set Columns by Item Type. Filter and Remove the Item Filter. Now you got a New Column = Sales Tax amounts, too.
Start making, filtering, retitle and Memorize your own reports. This is Your data to understand, so give yourself proper perspectives.
Please see my attachment.
