USA Posting revenue


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Hi,

We receive revenue payments about 2 months after the revenue period they belong in has passed. The revenue ranges between $500 and $2500. I have been back dating the revenue every month to capture it in the right period, but this is after our reconcilations are complete. The last payment we received was 3 months late. Every month is a different amount, so I don't feel like I should post it to AR because I can't verify the amount until we receive payment. For example, July's revenue was paid to us on October 13. I posted the invoice to October 13 this time (normally I would have posted it to July 31), but we just received August's payment today, so if I post this one to Oct 30, it will look like we have 2 payments in Oct. What date should I be posting the invoices to and when?

Thank you!
 
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kirby

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At first I thought you were on the cash basis of accounting. But then I noticed you said that you use an AR account, which is accrual basis accounting.
So you should be doing this under accrual accounting:

1. Record an accrual for revenue for the month - example record $500 sale in July and issue that invoice in July
July 31st entry
Dr Accounts Receivable $500
Cr Sales Revenue <$500>

2. Collect $50O from July invoice in October13
October 13th Entry
Dr Cash $500
Cr Accounts receivable <$500>

So to summarize
Post the sales revenue invoice into the month the revenue was earned.
Also
If there is an adjustment that pops up in a later month, adjust that in the month it pop up and not back to the date of the original invoice.
 

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