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Unbilled Receivables & Quickbooks

Proformative,
A customer of ours has accrued Unbilled Receivables for work performed. I've been properly recognizing the Unbilled Receivables by:

Debiting Unbilled Receivables
Crediting Accrued Revenue

However, I am ready to invoice the Customer (using Quickbooks). I would like to move Unbilled Receivables to Accounts Receivable and, while I know I can perform this action with a simple Journal Entry, I'd like the invoice to be created through Quickbook's invoicing system. Unfortunately, due to the format of Quickbooks, if I were to create an invoice the system would automatically create an AR entry for the same value. As a result, I would essentially be double-counting the AR (Unbilled Receivable Balance + the AR automatically generated by the Invoice).

Has anyone had any experience in Unbilled Receivables and Quickbooks?

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I don't believe you can automatically reverse the entry (I feel your pain, I have it with Stock in Transit).

So you either set-up the entry as auto-reversing or manually reverse the entry and then bill as normal.

This hack would be a great addition to all accounting systems....

Mark Gandy
Title: Founder/Owner
Company: G3CFO
LinkedIn Profile
(Founder/Owner, G3CFO) |

I concur with Wayne. Although an integrated job costing system that does WIP analysis could probably help with automation.

Here's one process I've created for one of my IT firms:

-1- Unbilled receivables are updated monthly via journal entry comparing this month to last. The net change either reduces or increases the unbilled asset account. We use a separate revenue GL account for this increase/decrease each month.

-2- We bill as usual pursuant to the milestones as outlined in the contract language. All billings are applied to one of 3 revenue GL accounts. So these three accounts are GAAP-sized via the other account mentioned above. Accordingly, this billing activity ignores -1- above.

Since we maintain manual WIP reports which are updated weekly, at times, we'll be 'in the money' where we've collected more cash than what we've expended. In those cases, we have Billings in Excess of Costs/Deferred Revenue. We also do a net change entry of this balance monthly and apply the increase/decrease when we do -1- above.

Tedious? Maybe, but the accounting maintenance takes just minutes each month.

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