Late Invoice Payments: How to Record Them Correctly
Handling late invoice payments accurately in your bookkeeping is essential for maintaining a clear audit trail, preserving healthy cash flow, and ensuring your tax filings (Self Assessment, Corporation Tax, and VAT) reflect reality. Whether an overdue customer payment is paid late, attracts statutory interest, or turns into an uncollectible bad debt, specific accounting procedures apply under UK GAAP and HM Revenue & Customs (HMRC) rules. Working with experienced accountants in Ilford or your local tax software specialist helps streamline your accounts receivable management, ensuring your financial records remain completely accurate and audit-ready. Late Invoice Payments: How to Record Them Correctly Accounting Methods & Timing of Revenue Recognition How late payments affect your financial reporting depends on your accounting scheme: Accrual Basis (Traditional Accounting): Revenue is recognised when the invoice is issued (or goods/services delivered), not when...