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When to mark an invoice as paid?
Should I record a payment to an invoice when I receive a check in the mail or only when I’ve deposited the check into my bank?
My situation is that I received a check from a client December 29th 2011 but the check wasn’t deposited in my bank until January 3rd 2012. I don’t want my books and Harvest reports to be conflicted about when the money was earned. (2011 vs 2012)
How do others handle this?
This is probably a question that’ll be best-answered by your bookkeeper or accountant, because I think it depends on whether you do your books on a cash basis or an accrual basis.
An accrual basis is more common, and that would dictate that you mark the invoice as paid when you receive the cheque. The deposit would be recorded in your accounting software whenever it happens after that.
But again, please check with your accountant!