Hi, I have created a new account type as assest which is for the some of the old payment received during this year for the work invoiced for the year 2020.
I have labeled this as Payment received for 2020 invoices and this was accounted for 2021 accounts. I have given a lock date as 31-12-2021 (last December) however this value is still showing in the balance sheet.
is there any way we can remove the items which was before 31st December form being accounted this year ?.
Balance sheet assets are perpetual and will always show at current dates if exist. This is normal practice as you still own these assets and if auditors or tax or lending authorities want to see your balance sheet it should show all that you own and owe at a particular date.
You probably should have created an account “Old Payments Received” as Profit and Loss income account as they are actual receipts (income) generated in the year 2020 rather than an asset.
I thought the this is normally handled by entering the invoices not fully paid into Manager, dated at the true invoice date.
Starting Balances: Enter starting balances | Fix starting balances
Cash or accrual reports for the current year should then be accurate.
Dear eko and Patch, the question I have is that this entries are 2021 entries. and in settings I have given a lock date as 31-12-2021. In 2021 accounts this items are shown, Since I gave the lock date anything beyond the lock date should be removed form appearing this years account ? -
Not for balance Sheet items, these will always appear irrespective of lock date as you would own these assets still now!
As mentioned you should not use an Asset Account for this as they were receipts (payments you received in 2021) and thus belong to a P&L income account in the Chart of Accounts. These will not appear in reports after lock date.
Thanks Eko, it is now working correctly, Thank you for your support.
Your understanding is not correct.
The lock date prevents financial changes being ENTERED into Manager prior to the lock date. It does not effect the reporting of financial data in any period.
A receipt is a financial transaction. A receipt in this year is a financial transaction in this year. The fact it is for an invoice in a prior year does not change this fact.
If you are using “Cash” based accounting a receipt in this year must be reported in this year profit & loss even if it is for an invoice last financial year
If you are using “Accrual” based accounting a receipt in this year for or an invoice in last financial year will not effect profit and loss instead it effects the Balance sheet accounts Accounts receivable / Payable. For this to occur though you have to enter last year invoice and allocate the receipt to that.
See above
