I operate a summer camp from Jul 1 to Aug 11. My fiscal is July1. I send out tuition invoices on March 31 and final payment is due by May 30 for the summer camp, which starts July 1. What date should I post on my billing invoice - March 31, July 1 ?
correct invoice date
Answers
March 31. All revenue is unearned until camp begins. Depending on how you sell tuition, the earning of revenue depends on the number of weeks they attend.
Thank you for your prompt response. One further question, are payments received handled any differently in this situation?
2
Payments received are Deferred Revenue (ie. collected but not yet earned). Revenue is actualized as the camp progresses.
Slight clarification. When you first create the invoice it's coded to A/R and Deferred Revenue. The payment just increases cash and decreases A/R like any other payment.
All of these answers assume you are using accrual-based
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Accounting