My question is, the sales are on 2019 sales reports because the sale occurred on 12/31 and the customers paid on 12/31 with credit cards. So I did receive payment on 12/31, but it was in process at the bank and the deposit from the merchant account only showed on my bank account on 1/2, next business day.
I am on cash basis ( modified cash), would these sales transactions be recorded for tax purposes for 2019, or 2020? I also had some checks I deposited but they of course were only available to me the next business day. Would those be 2019 sales since I received the payments on 12/31?
How would I record it at the end of the year, undeposited funds? They were deposited but they do not show on my bank account on 12/31 yet.
Thank you for helping me
Best answer March 09, 2020I disagree with the previous answer. It has been proven and upheld that the USPS acts as your agent in that checks postmarked 12/31 are considered to be yours as of that date and not when they arrive when you deposit them.
Same goes for a credit card transaction. You ran the card on 12/31 and recorded the received payment as such - or should have. It is 2019 business. Card, check, cash it is all the same on cash basis. You could be sitting on a boatload of checks written 12/31 -not yet deposited but that doesnot matter.
If you are going to claim 12/31 checks that arrive in the mail as 2020 you might need to keep the envelope they came in as long as it was postmarked in 2020.
And you cannot delay the posting of a credit card payment to when it is actually funded any more than you can record checks you write asof date they clear yourbankrather than date you created them.
If you properly record the Receive Payment for a credit card when entered-swiped-dipped QB will properly report your cash basis income to include that payment.
A final illustration. You don't delay posting a customer check payment until after enough time has passed that it does not get returned nsf