We are taking on a new project so I entered a new customer in the manager program. Now when I am creating the sales invoice for the total amount owed which account am I allocating the invoice to? If I allocate it to income, it shows up under income on the summaries page as the full amount of the invoice, even though we haven’t been paid the full amount yet.
If you are using accrual-based accounting, this is correct. While there are some arcane aspects to the determination, income is generally recognized when invoiced. In cash-based accounting, income is recognized when payment is received.
Regardless of which type of accounting you use, the invoice should usually allocate the billed amounts to an income/sales account of your choice. (When invoicing billable expense or time in Manager, different selections are made, but the charges ultimately end up either in an income account or have been passed through transparently to the customer.
So now when I am looking at the profit and loss statement for this certain job, I only see the income as the total amount invoiced and not what has been received so far. Is there a way for the profit and loss statement to show how much the customer has paid so far against the invoice?
Personally, I use the “Tracking Code” facility in the Profit & Loss report to express the margin on particular styles or types work.
However, as I use accrual based accounting, this does not indicated who has paid for what at any given time.
When I want to see who has paid for what, I use the “Aged Receivables” report.
Run a Customer Statement and select Unpaid Invoices as Type. That will tell you which invoices are still unpaid on a customer by customer basis. If you want to see past payments where there is no balance due, either look at the sales invoice itself or run a Customer Statement and select Transactions as Type. Specify a date rate.
No, because the Profit & Loss (or Income & Expenditure) Statement deals in the gross value of the transactions, not the cash flow value of the transactions - they aren’t cash flow reports.
As mentioned, Aged Receivables and Customer Statements, are used for Invoice/Payment management
Okay so I want to make sure I have this correct. So I am using tracking codes to identify the different projects I have and so I can run a profit and loss statement for each project individually. I cannot see on the profit and loss statement for each individual project how much money or how much income is coming in for each project, but only the total amount owed on that job? The only way i can see what how much money has come in as far as income from the customer for each individual project is through Aged receivables or customer statements?
If you are doing accrual-based accounting, your P&L will show expenses incurred during the time period for which the P&L is set and income recognized. For the income to be recognized, the customer does not yet need to have paid. The criteria is that the customer owes you the money, that you have earned it. As with expenses, the income will be for the time period covered by the report.
If you are using cash-based accounting (you have never said which), you will see expenses paid and income actually received during the time period of the report.
The fact will remain that Manager is not designed for project accounting, and anything you do will be a somewhat clumsy workaround. And by using Tracking Codes, you are limiting yourself to things actually coded with a tracking code, which may well not represent your true profitability, since many expenses are shared across many activities. Project accounting is in development, but not here yet.
Customer statements can give you some information, but they won’t be perfect, either.