Hi all. I am using quickfile for the first time. If a supplier has invoiced for me their services and I have paid for their services after the financial year end and subsequently only invoice client for those services can I enter the sale and transaction within the financial year that it took place. EG. service 27 July - Paid for 30 days after and billed around same time
Yes and that is what concept of accruals and prepayments is for under accrual accounting basis. You will have to journal the transaction under prepayments and accruals, reverse them after year end and then you can record invoices as normal
Thank you since I am new to Quick File will need to research how to do this. Thank you for your quick response.
You can set the journals to automatically reverse which saves having to remember to reverse them out. Accruals are for costs incurred but which you haven’t yet been invoiced. Debit should be the expense, and the credit is to the accruals code in the balance sheet, which then shows as a liability. Not sure if you’re VAT-registered but if so, you only accrue the net amount, i.e. excluding VAT.
Prepayments are the opposite - expenses which you have paid for, but where the service (or part of it) takes place at a later date, e.g. insurance. This time, credit the expense code and debit the prepayments account.
You also do the same thing with income - if you accrue for services you provided before year-end but invoiced after, then credit sales and debit accrued income. Or, for income for which you have been paid in advance, debit sales in the P&L and credit deferred income in the balance sheet.
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