Income sheet less unpaid invoices

Hi Is there a way to show income in report less invoices paid, I have just receipted an amount invoice and the income was the same. I will have a few unpaid before end of financial, the profit and loss sheet is showing unpaid invoices? If you have not received the money it is not an income in terms of tax liabilities…

You may need to set Manager to “cash accounting”. See Accrual or cash basis accounting

Yes it can be depending if your accounting is cash or accrual based. The majority of businesses are accrual based which means the invoice is shown as income on creation not on payment. However, if you want cash based go to Summary tab - Set Period and make your selection.

Thanks - yes figures are different, thanks

The accounts receivable has gone, would there be a way to show this in cash account, Summary?

I am not an accountant that is for sure, just interested … why accrual method if amounts not paid are shown as earnings, that would be an earning but not actually earned in that financial year unless you had a separate account for unpaid invoices?

In cash accounting, income is “earned” when you receive the cash.

In accrual accounting, income is “earned” when you make the invoice: when the cash is received is not important. You may even pay income tax on “earned” income, even though you will not receive the cash until the next tax year.

No, accounts receivable are non cash transactions. You can however switch between cash & accrual basis if you need to see.

Also on the other side, expenses are deductible when you receive the purchase invoice, not when you pay it. In the last month of the financial you might have more expenses then income so your taxable income would be less under accrual and more under cash basis. At the end of the day it all balances out.