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malone2023
February 7, 2023
Question

Receiving payments from invoices

  • February 7, 2023
  • 1 reply
  • 0 views

Hello, 

 

I have a client who is uses cash basis and he sent his customers to invoices, a few days later they paid him with a check and he marked the invoices off as paid and matched the check deposit to the invoice. But for some reason under the profit and loss statement it’s showing under accounts receivable and I’m not sure how to move it from accounts receivable to service income. Because he uses cash basis he technically shouldn’t have an AR account but I’m assuming because he sent the invoices it automatically put them in the AR account. When reviewing the invoices and transaction for when he matched the check deposit he has his checking account listed but for some reason it still listed under the AR account does anyone know how to fix this 

1 reply

R
Rasa-LilaM
February 7, 2023

Let me shed some light on what happened to your client's transactions, malone2023.

 

When a customer pays, you'll have to record the payment in QuickBooks to close the invoice or reduce the balance. The check showed under Accounts Receivable because it's categorized in the mentioned account. On a cash basis accounting income is realized when the invoice is paid.

 

For more in-depth information, you can browse this article: Choose between cash and accrual accounting methods in QuickBooks Online. It goes into great detail on how each method functions and how it affects your sales tax.

 

Furthermore, the links below provide a list of tools that will show you how to organize your sales transactions, manage your company's income, and learn when to utilize cash and accrual basis accounting:

 

 

If you have any clarifications or questions about cash basis accounting or any customer-related concerns, drop a comment below and tag my name. I'll get back to help you, malone2023.

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