Invoices issued in one tax year but paid in the next tax year

[Aerion]

Continuing the discussion from Using 'Cash basis' with Quick File:

@mdspc

As this topic is about to automatically close, I just wanted to say thanks to Philip, Gardenman and DonnaCBK for your feedback and help, it’s very much appreciated. I’m going to do a bit more research to fully understand what needs to be done when using cash basis with invoices that have been issued before the year end and payments received in the new financial year before attempting to run my year end.

Thanks again!

Hi @mdspc

Did you ever find out more about this? I have a couple of invoices outstanding from last year due to my client hitting financial difficulties. He still intends on paying them, but we’re now in the new tax year.

Thanks

[mdspc]

Hi Aerion,

For the end of my first financial year, I’d left the invoice that I discussed in the forum dated before my year end. This caused some (expected) complications though because the profit and loss report didn’t tie up to what had to be submitted to HRMC. I also had to make sure that the single invoice was documented so that when it was paid, it would be added on to the next financial year for my tax return.

As I also keep a spreadsheet that details the work I’ve carried out along with the date that it was done and when payment was received, this year end, I spoke to my customer and invoiced him a few days after the work was completed when he actually paid the money. That way, my profit and loss report was correct as were all other amounts, (bank accounts etc). All I did was to add notes on to my spreadsheet to show the date the work was actually done, the date I invoiced the customer, when payment was received and some notes to explain that it had been done this way as QuickFile doesn’t directly support cash basis accounting. You could always add your own similar notes to the actual invoice on QuickFile.

I hope that helps.