Why are unpaid invoices showing on the Income & Expenditure Report?

If your accounting basis in ExpensePlus is set to 'accruals' (typically churches and charities with an annual income of over £250,000) AND you have the setting for auto-accruals enabled, then ExpensePlus will automatically accrue for both purchase expenditure and invoice income.

This means that income will show within your reports based on the date the customer is invoiced, rather than the date you are paid.

For example, if you invoice a customer for £100 in February for room hire, then this income will show in February (regardless of when they pay).

From a 'cash point' of view, this money may still be outstanding at the end of February, in which case the £100 you are owed will be showing on the 'Accounts receivable' line of your balance sheet.

At the point the customer pays you, and this incoming amount is reconciled against the invoice, the balance sheet automatically updates. The 'Accounts receivable' line of your balance sheet reduces by £100 to reflect that this money is no longer owed to you.

Top tip: if you have auto-accruals turned on, then it's worth checking at the end of each month that your accounts receivable balance is correct, and that the amounts showing as owed are correct.

Warning: if you wrongly match an incoming invoice payment as 'income received' rather than as an 'invoice payment', then the invoice will wrongly continue to show as 'outstanding'.

Furthermore, if you have auto-accruals enabled, the outstanding amount will also wrongly show on your balance sheet as outstanding, and the income will be wrongly double counted as well.

To help you better understand the invoicing module as a whole, please visit the module overview page here.

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