Report to show yearly income

Posted by dpb on August 29, 2009, 2:58 pm

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Meebers wrote:

>>> What I am trying to do is to show total income for "year to date." I

>>> send out invoices on 1 Dec each year, they are due 1 Jan. Some customers

>>> pay during the month of Dec (early) while the majority of the customers

>>> pay after 1 Jan. I send all payments to the non-deposited account and

>>> then sometime after the 1st of January, I deposit them into the bank

>>> account. If I do a report to show income "year to date' it obviously

>>> leaves out those who paid early. I could include December, but that

>>> would mix income from both years. I am sure this is not a new problem,

>>> but was wondering how things like this are handled? TIA

>> Are you saying that you only issue one invoice to each of your customers

>> each December 1st that covers an entire year?

>> Yes.....it is a yearly assessment...covers 1 Jan thru 31 Dec

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.

--

Posted by Laura on August 29, 2009, 5:18 pm

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> Meebers wrote:

>>>> What I am trying to do is to show total income for "year to date." I

>>>> send out invoices on 1 Dec each year, they are due 1 Jan. Some

>>>> customers pay during the month of Dec (early) while the majority of the

>>>> customers pay after 1 Jan. I send all payments to the non-deposited

>>>> account and then sometime after the 1st of January, I deposit them into

>>>> the bank account. If I do a report to show income "year to date' it

>>>> obviously leaves out those who paid early. I could include December,

>>>> but that would mix income from both years. I am sure this is not a new

>>>> problem, but was wondering how things like this are handled? TIA

>>>

>>> Are you saying that you only issue one invoice to each of your customers

>>> each December 1st that covers an entire year?

>>>

>>> Yes.....it is a yearly assessment...covers 1 Jan thru 31 Dec

> 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.

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.

Posted by dpb on August 29, 2009, 6:09 pm

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Laura wrote:

>> Meebers wrote:

>>>>> What I am trying to do is to show total income for "year to date."

>>>>> I send out invoices on 1 Dec each year, they are due 1 Jan. Some

>>>>> customers pay during the month of Dec (early) while the majority of

>>>>> the customers pay after 1 Jan. I send all payments to the

>>>>> non-deposited account and then sometime after the 1st of January, I

>>>>> deposit them into the bank account. If I do a report to show income

>>>>> "year to date' it obviously leaves out those who paid early. I

>>>>> could include December, but that would mix income from both years.

>>>>> I am sure this is not a new problem, but was wondering how things

>>>>> like this are handled? TIA

>>>>

>>>> Are you saying that you only issue one invoice to each of your

>>>> customers each December 1st that covers an entire year?

>>>>

>>>> Yes.....it is a yearly assessment...covers 1 Jan thru 31 Dec

>> 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.

> 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.

...
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... :) )

--

Posted by Haskel LaPort on August 30, 2009, 8:45 am

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> Laura wrote:

>>> Meebers wrote:

>>>>>> What I am trying to do is to show total income for "year to date." I

>>>>>> send out invoices on 1 Dec each year, they are due 1 Jan. Some

>>>>>> customers pay during the month of Dec (early) while the majority of

>>>>>> the customers pay after 1 Jan. I send all payments to the

>>>>>> non-deposited account and then sometime after the 1st of January, I

>>>>>> deposit them into the bank account. If I do a report to show income

>>>>>> "year to date' it obviously leaves out those who paid early. I could

>>>>>> include December, but that would mix income from both years. I am

>>>>>> sure this is not a new problem, but was wondering how things like

>>>>>> this are handled? TIA

>>>>>

>>>>> Are you saying that you only issue one invoice to each of your

>>>>> customers each December 1st that covers an entire year?

>>>>>

>>>>> Yes.....it is a yearly assessment...covers 1 Jan thru 31 Dec

>>>

>>> 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.

>> 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.

> ...

> 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... :) )

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

> --

Posted by Haskel LaPort on August 30, 2009, 8:43 am

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>> Meebers wrote:

>>>>> What I am trying to do is to show total income for "year to date." I

>>>>> send out invoices on 1 Dec each year, they are due 1 Jan. Some

>>>>> customers pay during the month of Dec (early) while the majority of

>>>>> the customers pay after 1 Jan. I send all payments to the

>>>>> non-deposited account and then sometime after the 1st of January, I

>>>>> deposit them into the bank account. If I do a report to show income

>>>>> "year to date' it obviously leaves out those who paid early. I could

>>>>> include December, but that would mix income from both years. I am

>>>>> sure this is not a new problem, but was wondering how things like this

>>>>> are handled? TIA

>>>>

>>>> Are you saying that you only issue one invoice to each of your

>>>> customers each December 1st that covers an entire year?

>>>>

>>>> Yes.....it is a yearly assessment...covers 1 Jan thru 31 Dec

>> 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.

> 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 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.