Paid invoices go into accounts receivable

1

I followed the instructions in the manual when I mark an invoice as paid. That is I click new receipt and then the invoice displays as paid. However when I generated my general ledger for the accountant, all that money was sitting in accounts receivable and so didn’t show as income. I then went through the process of specifying every item in every receipt and this caused all the invoices to flip back to being marked as unpaid (overdue). If I remark them as paid, I get a second receipt generated which then looks like I have double the income. I don’t know what to do.

2

If you are using sales invoices, then income is captured at invoice level. When customer pays for the invoice, they are merely settling the accounts receivable debt.

3

In that case how do I resolve the issue that I am facing? I still need to generate reports for tax purposes and the numbers are all over the place. I feel like I am not following the right process.

4

The solution depends on if you have elected to submit your financial records to your tax authority using

  • Cash based accounting (in which case you need to set that in the reports you use to submit to your tax authority, and issue of an invoice should have no effect on reporting to your tax authority, that happens when an invoice is paid).

  • Accrual accounting (in which case payment of a invoice should have no effect on financial reports to the tax office, that happens when the invoice is issued)