Claim (bookkeeping)
How I usually incorporate a claim or vordering in an administration, e.g., around invoicing:
Send an invoice
Account kind | Debet - Balance | Credit - P&L | Credit - Balance Account | Accounts receivable | Revenue | VAT to disburse | (debiteuren) | | ------------------------------------------------------------------------ Figure | <amount incl. VAT> | <amount ex. VAT> | <VAT amount>
When I wrote this article, I found it hard to grasp that accounts receivable is a debet balance account: As a rule of thumb, debet balance accounts are for me like what you do with the stuff that you got on the left, and accounts receivable doesn't always look like that, at it is doesn't always look like I am doing something with it. However, it does make sense now: It's capital tied-up with your customers, and that's very real
Income statement
In The Netherlands, there are two systems for bookkeeping: Cash-based and invoice-based. An example of a cash-based system, is selling stuff on a market. In this case the bookkeeping is based on actual cashflows.
The invoice-based bookkeeping system is the most common: Bookkeeping is primary based on invoices. E.g.: Profit is recognised by virtue of a invoice being send, not the reception of the corresponding cash. This kind of bookkeeping is probably by far the most common. All articles on this wiki assume a invoice-based bookkeeping system:
Within the invoice-based bookkeeping system, sending an invoice directly affects the income statement: It's the primary revenue-generating bookkeeping mutation.
Balance sheet
Sending an invoice, impacts the balance sheet:
- Accounts receivable is a form of asset
- Through the equity equation, equity is affected: Equity = Assets -/- Liabilities → Equity increases.
Reveive payment
Simple: Just an exchange between two debet balance accounts:
Account kind | Debet - Balance | Debet - Balance Account | Accounts receivable | Bank account | (debiteuren) | ------------------------------------------------------- Figure | <-amount incl. VAT> | <amount incl. VAT>