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Love2LearnMore
March 2, 2021
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How to record vendor invoice and payment to vendor in QuickBooks for Cash Basis

  • March 2, 2021
  • 1 reply
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Hi Everyone - If I need to use Cash basis method for Financial reporting, what date should I use to record vendor invoices and payments to vendor invoices?  For example, if the invoice is dated January 1, 2021 and due on January 31, 2021.  I make out a check dated January 25, 2021, but check is cleared on February 3, 2021 which is the date the bank account balance decreased, do I record the payment date as January 25th (check date) or February 3rd (cleared date)?  Thank you for your help!

Best answer by BigRedConsulting

Use the bill's date for the bill and the check date for the check.

 

When you write a check, the expense is recognized on a cash bases based on the check date, not when it clears your bank. Otherwise you'd be subject to the whims of those you write checks to, when - if ever - the decide to deposit the check.

 

The same is true for Payments you receive from customers.  The income is recognized on the date of record for the payment (perhaps the day you received it) and not when you get around to going to the bank and depositing it, which is not relevant.

1 reply

BigRedConsulting
BigRedConsultingAnswer
March 2, 2021

Use the bill's date for the bill and the check date for the check.

 

When you write a check, the expense is recognized on a cash bases based on the check date, not when it clears your bank. Otherwise you'd be subject to the whims of those you write checks to, when - if ever - the decide to deposit the check.

 

The same is true for Payments you receive from customers.  The income is recognized on the date of record for the payment (perhaps the day you received it) and not when you get around to going to the bank and depositing it, which is not relevant.

    L
    Love2LearnMoreAuthor
    March 2, 2021

    That's exactly how I recorded the transactions, but wasn't 100% sure.  Thank you so much!

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