Receipt of amount posted against Invoice is not reflected in INCOME in Profit & Loss Statement. I have not checked other reflections. Please advise.
SS Nair
There are two possible ways to record your transaction
- Accruals basis
- Cash basis
If using 1 Accruals basis, then income is recorded when you create the invoice, not when you receive the payment
If using 2. Cash basis, then income is recorded when you receive the payment
Which are you using?
If you do not know, then read this guide Choose between accrual or cash basis accounting | Manager
Thank you.
Difficulty may be due to lack of my Accounting knowhow.
SS Nair
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@SS_Nair what @Joe91 is explaining is that when you add for example a $100 Receipt to your invoice you only would see an increase of $100 in P&L Income if you record transactions on Cash-basis. When using Accrual-basis then you would see an increase of $100 in P&L income at the time you create the Invoice (so in essence it is already added to your income at the time of creating the Invoice, the receipt will help to clear that invoice but no longer will add to Income as it already did).
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