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T
Tran Level 1
January 28, 2019
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Issue invoices in different months but revenue account stay in 1 month

  • January 28, 2019
  • 1 reply
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Hi everyone

We have projects lasts for months and issue the 3 invoices : 50% when contract signed, 30% when order shipped and 20% when order delivered. We also pay the vendor in progress: 50% / 50%. 

However, we want to record the revenue and cost at the month when contract signed and 50% deposit received.

Estimates couldn't help in this case since the estimate is not reported in balance sheet or income statement of the month. 

Please advise if QBO has function that supports progress invoicing.

Best answer by Rustler

Non refundable deposits are income when received so that is not a problem

 

I understand what you are wanting to do, but unless you report on accrual it can not be done.

And if you do report on accrual basis then you need to invoice for the full amount and accept a partial payment, the invoice will stay open for the balance, and you can receive each payment when due.

 

The issue with doing it this way is reminding the client, you could create an estimate titled Pro forma Invoice, non posting, to send them as a reminder - or an email, but other than that choices are limited

1 reply

Rustler
Rustler
January 28, 2019

most likely the issue is the report basis

 

Cash basis, income is reported when received

 

accrual basis, income is reported when the invoice is saved

 

the other aspect is the deposit invoice, if it the full amount and you ask that 50% be paid, then the full amount is posted as income under the accrual basis reporting

T
Tran Level 1Author
January 28, 2019

Thank you Rustler

I would like to give you an example to see if what you advised can be applied in my case

- Customer confirmed order in 10 Jan and we issued an invoice of 50% of the total amount for customer on the same day (this is non-refundable, so we don't call it deposit because at the same time we have to pay the vendor)

- On 15 Feb, factory completed the order and we ship it to customer. We issue 2nd invoice of 30% of total amount on 15 Feb 

- When the vessel arrive at destination, let's say on 15 Mar, we issue the 3rd invoice to collect the remaining amount 

Since we also have to pay vendor on 10 Jan, costs occurred in Jan and the whole revenue should be recorded as whole in Jan as accounting principle. 

Is there any way to do it?

Thanks

A
Anonymous
January 28, 2019

Let me join in, Tran Level 1.

 

If you want to show the income and expense when the contract was signed, you can set your reports into accrual basis of accounting. This would recognize your income and expense on the day you’ve created the invoice and bill.

 

Here’s how to set your reports into accrual basis:

  1. Click the Gear icon at the top.
  2. Select Accounts and Settings.
  3. Choose Advance from the left panel.
  4. In the Accounting section, click the pencil icon.
  5. Select Accrual on the box next to Accounting method.
  6. Click Save and Done.

Stay in touch if there’s anything else you need.

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