% Invoicing

Businesses send invoices to clients to request payment. You may want to track, eg:

- how much is due to be invoiced
- how much has been invoiced but not yet paid
- how much has been invoiced and paid.

How to record invoices and payments varies depending on whether the business
uses the Accrual or Cash accounting method.

## Accrual accounting

Revenue is recorded (and taxed) in the period when the corresponding goods/services
are provided - not at the time of payment, which usually happens after some delay.
The expected payment is tracked as a receivable, which is a type of asset.

A good time to record revenue is when the receivable is created (by sending the invoice).
So:

```journal
2020-02-01 * (202001ab) AB Inc. | invoice for work done in january
    revenues:consulting:ab     $-1000
    assets:receivable:ab        $1000

2020-02-15 * AB Inc. | receive full payment for 202001ab
    assets:receivable:ab       $-1000 ;= $0  ; optional: when paid in full, assert that
    assets:checking             $1000
```

## Cash accounting

Revenue is recorded when money is actually received:

```journal
2020-02-15 * AB Inc. | receive full payment
    revenues:consulting:ab     $-1000
    assets:checking             $1000
```

In Cash accounting, invoices are not always tracked.
If you want to track them, you can use equity to balance the transactions, as follows:

```journal
2020-02-01 * (202001ab) AB Inc. | invoice for work done in january
    assets:receivable:ab        $1000
    equity:receivable          $-1000

2020-02-15 * AB Inc. | receive full payment for 202001ab
    equity:receivable           $1000
    assets:receivable:ab       $-1000 ;= $0
    revenues:consulting:ab     $-1000
    assets:checking             $1000
```

## Estimated tax

If you're a freelancer in the US, eg, you may be responsible for 
paying estimated income taxes. Here's the above transaction,
with additional postings to track and save for tax owed:

```journal
2020-02-15 * AB Inc. | receive full payment for 202001ab and save estimated tax
    equity:receivable           $1000
    assets:receivable:ab       $-1000 ;= $0
    revenues:consulting:ab     $-1000
    equity:payable:us:2020       $150  ; estimate new tax owed, eg 15% 
    liabilities:tax:us:2020     $-150
    assets:checking:tax:us:2020  $150  ; save that amount (in a virtual subaccount)
    assets:checking              $850
```

## See also
- [invoicing entries](https://gist.github.com/simonmichael/986a65106a9db1f8bd68)
- [Ledger Practices: Tracking Reimbursable Expenses](https://felixcrux.com/blog/ledger-practices-tracking-reimbursable-expenses)
- https://en.wikipedia.org/wiki/Basis_of_accounting
- https://plaintextaccounting.org/#invoicing
- https://github.com/simonmichael/hledger/tree/master/examples/invoicing
- [kairos](https://kairosdotapp.github.io) ([repo](https://github.com/kairosdotapp/kairos))

<!-- mockup for badges that could be added by a lint tool. These would cover all examples on the page. -->
Examples tested on 2022-01-09 with:
![](https://img.shields.io/badge/hledger-1.24.1-brightgreen.svg)
![](https://img.shields.io/badge/ledger-3.2.1-brightgreen.svg)