Invoicing
Pages 34
Clone this wiki locally
Businesses send invoices to clients to request payment. You may want to track, eg:
- how much is due to be invoiced
- how much has been invoiced but not yet paid
- how much has been invoiced and paid.
How to record invoices and payments varies depending on whether the business uses the Accrual or Cash accounting method.
Accrual accounting
Revenue is recorded (and taxed) in the period when the corresponding goods/services are provided - not at the time of payment, which usually happens after some delay. The expected payment is tracked as a receivable, which is a type of asset.
A good time to record revenue is when the receivable is created (by sending the invoice). So:
2020-02-01 * (202001ab) AB Inc. | invoice for work done in january
revenues:consulting:ab $-1000
assets:receivable:ab $1000
2020-02-15 * AB Inc. | receive full payment for 202001ab
assets:receivable:ab $-1000 ;= $0 ; optional: when paid in full, assert that
assets:checking $1000
Cash accounting
Revenue is recorded when money is actually received:
2020-02-15 * AB Inc. | receive full payment
revenues:consulting:ab $-1000
assets:checking $1000
In Cash accounting, invoices are not always tracked. If you want to track them, you can use equity to balance the transactions, as follows:
2020-02-01 * (202001ab) AB Inc. | invoice for work done in january
assets:receivable:ab $1000
equity:receivable $-1000
2020-02-15 * AB Inc. | receive full payment for 202001ab
equity:receivable $1000
assets:receivable:ab $-1000 ;= $0
revenues:consulting:ab $-1000
assets:checking $1000
Estimated tax
If you're a freelancer in the US, eg, you may be responsible for paying estimated income taxes. Here's the above transaction, with additional postings to track and save for tax owed:
2020-02-15 * AB Inc. | receive full payment for 202001ab and save estimated tax
equity:receivable $1000
assets:receivable:ab $-1000 ;= $0
revenues:consulting:ab $-1000
equity:payable:us:2020 $150 ; estimate new tax owed, eg 15%
liabilities:tax:us:2020 $-150
assets:checking:tax:us:2020 $150 ; save that amount (in a virtual subaccount)
assets:checking $850
See also
- invoicing entries
- Ledger Practices: Tracking Reimbursable Expenses
- https://en.wikipedia.org/wiki/Basis_of_accounting
- https://plaintextaccounting.org/#invoicing
- https://github.com/simonmichael/hledger/tree/master/examples/invoicing
Examples tested on 2022-01-09 with:
Home |
About |
shortcut: wiki.plaintextaccounting.org/PAGE |
chat: #plaintextaccounting |
main site: plaintextaccounting.org
contribute: join chat and suggest improvements,
or log in to github and click Edit / New Page,
or clone and send a PR/push