manager base much in accurual accounting but cash accounting is impontant too, this is observed in receipts.
the way most softwares, when you receive money from invoice, you select the invoice from drop down and then it opens a form with those iterms in that invoice and you enter the amount received in each iterm. this will prevent percent distribution that manager does.
in manager when you receive money from invoice it just bring the total amount of money in that invoice and you enter what you have received. this have problems when someone is using manager in cash bases. since it will distribute in percentage to cover those iterms in that invoice.
then it should be is when you select an invoice a person should enter amount per each iterm in that invoice and if one iterm in that invoice is not paid in fully we should know within the invoice. but now you just receive the money without posting it to its specific ledger. the invoice says you paid half but you dont know what iterm the person paid for.
please @Tut@lubos and others discuss in this in order to get an organized receipt format
When you receive money against a sales invoice, you are not receiving money for specific line items on the sales invoice, but against the receivable itself. Manager is not accounting for the receivable by line item. Money is interchangeable. The customer has given you a certain amount, but that amount is not for Line Item A or Line Item B, it is for Sales Invoice X. So there is no need for such a feature.
And, if a customer gives you money for several sales invoices, you can split the receipt into multiple lines, posting relevant amounts against specific sales invoices.
It is also my opinion that cash basis accounting is not a suitable choice when selling on credit, because it misrepresents your financial position. And that is what you are doing in the situation you describe—selling on credit. The customer is paying for only a portion of what is owed. If that is what you expected or will allow them to do, you should have issued multiple sales invoices. Further, if the “items” you mentioned are inventory items, cash basis accounting may not be permitted in the first place. In many jurisdictions, it is not when a business carries inventory, precisely because your financial position is misrepresented.
from your point @Tut it means in accrual we can post ten iterms in one invoice but in cash basis we can not post ten iterms in one invoice, then we should create ten invoices. thus having many many invoices.
for this issue it means using manager in schools, colleges, university or anywhere that dont use manager for inventory, manager is not suitable in that case otherwise we should force to use it. example.
in student fees there is a stationery fee, library fee, food fee, management fee, id card fee, school fee and so on. i created p&l accounts in chart of accounts for those iterms to show how much i received in each.
so when i will create one invoice to a student having those iterms then it will be difficult for me to collect those fees.
But I should create more than ten invoice to a single student each iterm in one invoice.
for this i will have many many invoices Sir.
manager is good only for shops or industries that involve inventory.
I think you understand my point there.
accrual involve money on air, meaning income is generated upon creating invoice. the income section will grow higher and higher even if you dont have anything in the pocket but manager is flexible that we can switch to cash basis but when you do so you are going to see ghosts in income because of percentage.
If you did that, and posted the line items on your sales invoices to those accounts, your profit and loss statement will reflect the allocations. What you are unhappy about is that those income allocations will not show up until you have received the money from your customers (students). That is the shortcoming of cash basis accounting. The income is still recorded behind the scenes. But when you select cash basis, it is not reported until the receipt is entered.
Why? Collection has nothing to do with accounting basis. Your collection activities can be just as effective with either. But with cash basis accounting you will have less visibility into your current position.
Again, this is absolutely not true.
No, I do not.
Accrual based accounting means that income is recognized when it is earned. In your case, that means when invoiced. But that is only the profit and loss side of things, your performance. Your financial position is shown by your balance sheet, where the unpaid invoices will show as an asset in Accounts receivable. That is what you are missing completely with cash basis accounting.
It can be.
@Hosea_Leonard, the more you write, the more you convince me that cash basis accounting is not suitable for your school situation.
Actually it dosent matter are u using accurual or cash basis accounting. In generally money never has a label. Its only in your mind but not in the accounting. If the money are in the bank, so thats mean then the bank owns it and bank can do with this money what ever they want.
The same situation is also by the payments. There is a balance and the balance will be paid! And all this philosophy are coming from the times, when people didnt have PC-s etc.
Also your invoice has total amount, thats mean all the rows are summed up to the total, and as you see, the total dosent have any label anymore! Its just one amount. If you need a labels, then you need to make for each item an invoice. I think, its quite much laber costs.