Report to show yearly income

Have you tried running a Custom Transaction report on the Income account for December to today?

As you indicated, any payments received in December belong to the prior year's income. Given that, what exactly are you trying to accomplish?

Are you saying that you only issue one invoice to each of your customers each December 1st that covers an entire year?

Repeating: What I am trying to do is to show total income for "year to date." (1 jan thru 31 dec)

I have tried the custom transaction, Dec to date, but if there is additional income, it belongs to income for the current year, I do not want to have it counted towards next years income. Income may come from various categorys, don't know if appending the categories with "2009"? would solve this or not. ?

He's saying some payments received in December are *advance* payments for service to be provided the following year.

Several possibilities, other than a reporting contortion:

1) change your fiscal year to match your business cycle 2) record the payments received early as an upfront deposit or retainer

-- in other words, a liability until January when the income is actually earned and applied to the invoice.

3) assuming this happens every year and it is a cash basis business, just live with it: the business receives most of its income in January and December.

-Mark Bole

Based on what: date of payment or date of invoice? (see below)

Are you a cash or accrual based company?

If you are a cash basis company then the date of the payments drives what year the income gets reported.

If you are an accrual based company then the date of the invoice drives the year the income gets reported.

Make sure your reporting basis is set correctly.

We are Cash...this is what the last treasurer did. Even though some checks were received in Dec, they were entered into "undeposited funds" they were never deposited (transfered from undeposited funds to bank account) until Jan 1 or after. The deposit slip and the journal entry was a large split entry showing the amount, name, check # etc. Typically made 4 large deposits in the months of Jan/Feb. Then a dribble of deposits for those who "forgot or their dogs ate the check" + the late fee's. Perhaps this year, since I am the one wanting to document very clearly what transpires, perhaps not open the mail or make any entries until after 1 Jan. Also trying some things that Mark suggested....Tx to all for your suggestions/comments.

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The previous bookkeeper was not recording anything in QB until after Jan 1 so that all payments received/recorded in QB hit in the current year. That is certainly one way of doing it. Not necessarily kosher. If you ever were audited and someone examined the dates on those checks, those received in December could cause problems. It would be hard to convince an auditor that a payment received on December 15 belonged to the income recorded in the following year.

Another suggestion would be to change the timing of the invoices sent. I would date them Jan 1 due Feb 1. That way all payments received will be in the correct year and there will be no question about which year the income belongs to if you are ever audited. Using the Jan 1 date would also be appropriate if you were an accrual based company.

FYI: the date of the income in QB is driven by the date of the Receive Payment transaction and not the date of the deposit that moves the $ from Undeposited Funds to the bank account.

I agree with what you said..(FYI)and the QB reports indicate that also, The previous treasurer, was recording them in QB when received but in the undeposited accounts fund. (explained earlier) Will have to go looking for definations of the date receive payment...i.e. is it when I open the envelope or I believe what you are saying is the date on the check.? (this could be tricky if the mail had delayed some payments) Some times but now always, the check memo will indicate "payment for year 2009...etc" Changing the dates of the invoices could be done with great difficulty since it is mandated in the company bylaws to be sent out 30 days prior to Jan 1. It also defines the year as 1 Jan - 31 Dec. I have found that most Title companys like 1 jan- 31 dec when they have to prorate these fees when there is an owner change. Again tx for you comments.

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Check the date on those entries in the UF account. I suspect it was Jan 1 instead of Dec when the checks were received. Again, ignore the date of the transaction that deposited the funds into the bank account. It is the date the $ hit the UF account that counts.

The term that you looking for is "Constructive Receipt". Do a google search on that phrase and you will find the definition and some examples. It would not be the date of the check but perhaps a few days later to allow time for mail delivery.

I guess that is out of the question then. I guess the folks that wrote the by-laws were not thinking about accounting issues when they wrote them.

If the assessment covers January 1, to December 31 then the invoice date should reflect a January 1st date. If financials are issued as at December

31st then a simple journal entry crediting prepaid assessments and debiting some contra accounts receivable account for any assessments received in advance would be in order. The journal entry would be reversed on January 1st.

Since this is a cash basis company would this be acceptable practise? It certainly would apply to an accrual based company which is why I asked that question yesterday.

Absolutely, it is no different than receiving or paying a deposit. Both cash and accrual basis entities should account for them the same. No services or goods have been exchanged yet. All that has occurred is that there is a promise of future goods or services being exchanged.

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My question is what difference does it make, really? If you the company really is on cash accounting basis, record receipts when they're received. At worst the first year will have a slight spike from the early payers but after that almost certainly the same folks who pay early this year will next, and the next, and the next... Likewise w/ the late-bloomers; they'll habitually be late. Hence, over more than a single year it'll all work out and you'll not have to do anything extra nor try to justify some shenanigans on holding checks or other bookkeeping legerdemain to make some artificially-contrived neat-looking receipt of income in any given calendar year.

If the issue is you want to be able to determine which clients are paid for the current service year, that's a different question/search.

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I believe he wants to show the income related to those that paid for 2009 services on a 2009 P&L even if they paid in 2008.

Alan's suggestion of recording the 2008 payments as prepaid revenue and doing a J/E in January to record the income in 2009 is a good suggestion. It certainly is better than holding the checks until 2009 to record the payments.

... I understand that; that's a different question in reality, however; it's an artificial P&L that reflects the way they wish things were rather than how they are. If he wants that report imo he should code for it by some other technique than dating.

But, as far as the P&L, after the first year it'll all balance out anyway--the specific early payments will show up in the previous year, sure, but next year they'll balance almost identically because it'll be highly unlikely the payers' habits will change drastically from year to year.

$0.02, imo, ymmv, etc., etc., of course...(and, of course, I'm an engineer so it just seems logical... :) )

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I am not Allan, I could never fill the man's shoes. That said your interpretation is incorrect.

1. Record, print and mail out invoices with a January 1st date.
2. Record any early receipts against the customers account when received. This will show up as a credit balance in accounts receivable for each customer paying in advance.
3. If financial statements are issued and the reporter want to be a fancy pants then make a journal entry (which gets reversed) to reflect the credit balances in AR

In any event holding on to the checks is a bad idea and is not recommended or required for any reason.

If you were a CPA such as moi, then my sugestion would make a hell of a lot more sense (cents :)) than your idea.