self-emp (sole trader): Invoice date and money credited date

[karthik_513]

Hi All,

This is regarding my self-employment(sole trader):

For my Clients, I raise the invoice on 12th of every month and the money is credit from my Client's business account to my business account on 20th of the same month, so there is a gap of 7 days from the day I raised invoice and got paid for that invoice/work. This has happened in the last 12 months.

Will the above be an issue when claiming points for my previous earning during my Tier 1 Extension??

Few people who I know said the date on the invoice and the date the money was credited to the account for that invoice SHOULD be the same … IS THIS CORRECT ??? Or can it be different dates???

Please advise and thanks in advance.

[Lucapooka]

It's fine, but what can't happen is that, in the last month, you have an outstanding invoice that has not yet been paid, but are claiming that sum. For who is to say that it will ever be paid and would not, therefore, be real income.

[karthik_513]

Thanks for the reply @Lucapooka. I will only send the invoices which i have got paid to my business account (not going to show/send any invoice which are awaiting payment) for my Extension.

Thanks again.

[HSK Accountancy Services]

Hi All,

This is regarding my self-employment(sole trader):

For my Clients, I raise the invoice on 12th of every month and the money is credit from my Client's business account to my business account on 20th of the same month, so there is a gap of 7 days from the day I raised invoice and got paid for that invoice/work. This has happened in the last 12 months.

Will the above be an issue when claiming points for my previous earning during my Tier 1 Extension??

Few people who I know said the date on the invoice and the date the money was credited to the account for that invoice SHOULD be the same … IS THIS CORRECT ??? Or can it be different dates???

Please advise and thanks in advance.

For purely accounting point of view the date of invoice is important as the income was accrued at that day. The date of payment is irrelevant. You will show that as your income in the accounts when preparing your accounts. If you suspect that it will not be paid then you need to create a bad debt provision.

Now, HO point of view, it should not create an issue as well if you can show that invoice was subsequently paid by showing the payment in your bank statement. In a real business world you are not expected to be paid at the same day when you send the invoice to your client. You will be lucky if you are paid in 7 days payment term.

I hope this is helpful