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Currently unpaid invoice showing up in profit and loss
I have an invoice that, at present, is unpaid. There is also a slight risk that this client wont pay. Regardless the full invoice amount is showing up in the profit and loss. Is this correct behaviour?
I’m confused
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Inappropriate?Hi Benjamin,
Yes, it's correct that an invoice appears in the profit and loss as soon as it's sent to a client.
The Sales in the P&L shows invoices sent - not invoices paid.
If the client doesn't pay, you can quickly write the invoice off as unpaid by opening the invoice and clicking the "Write off Unpaid" button.
Does that help, please?
Kind regards,
Emily
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this solves the problem
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Inappropriate?Is that the standard way of doing it?
Should invoices go onto P&L immediately, not when they have been paid? When they do get paid, will anything change or will the invoice amount stay in the original month's column? -
Inappropriate?Hello Gemma,
Yes, indeed - that's the standard way of doing it. Here in the UK, we have to put invoices in as income, on to the P&L (which is shorthand for profit and loss account), as soon as they're issued.
Some other countries do allow freelancers to report on a "cash basis" - i.e. only include invoice on their P&L to pay tax on once payment is received - but sadly, the UK doesn't do that!
When you're paid for the invoice, nothing on the P&L will change - the invoice will stay in the month it was invoiced.
Does that help, please?
Kind regards,
Emily
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this solves the problem
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