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L
lisa-2i-t-com
March 10, 2025
Question

Recording payment - accrual method

  • March 10, 2025
  • 2 replies
  • 0 views

If you receive payment for an invoice you sent out - do you record the payment date as when it was received or when it went thru the bank/ was cashed when using the accrual method?

2 replies

R
Rusimyhr
March 10, 2025

Hello, Lisa! Let me share some insights that can shed light on your question. 

 

In accrual accounting, you record the payment date as the date you receive the payment. This approach recognizes income when it is earned, rather than when cash is received. In QuickBooks Online, you would enter the payment on the date it was received, which reflects the time when the revenue was recognized for accounting purposes.
 

Additionally, you may find this article helpful for ongoing management of your QuickBooks account: How to Reconcile in QuickBooks Online. This is vital for compliance with financial regulations and standards, as it prepares you for any potential audits by ensuring that your financial documents are in order.

 

If there’s anything more you’d like to explore or clarify about recording payments, feel free to share your thoughts below. I'm here to help!

    L
    lisa-2i-t-comAuthor
    March 10, 2025

    So if the check was received in February, but the bank did not post the deposit until March, you would post the payment as to when the check was received (February) - not the date of the check or when the bank posted it correct?

    Rainflurry
    Rainflurry
    March 10, 2025

    @lisa-2i-t-com 

     

    "So if the check was received in February, but the bank did not post the deposit until March, you would post the payment as to when the check was received (February) - not the date of the check or when the bank posted it correct?"

     

    Correct.  Post it as of the date you received it - it's what the IRS calls "constructive receipt" (when the funds are available to you without restriction). However, if you're on accrual basis, the income is recorded as of the invoice date, so the payment received date only serves as the date that A/R is reduced and the check is deposited into the bank account (if the same date) or into undeposited funds if you make the deposit at a later date.

      FishingForAnswers
      FishingForAnswers
      March 10, 2025

      @lisa-2i-t-com  @Rainflurry  covered it quite well, but just to make it clear:

       

      There is no accounting method that operates based on when checks clear the bank. There are way too many variables involved in that for a set of books based on it to be at all coherent.

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