Invoice for work that overlaps the year end

[the4thamigo_uk]

I performed a week of work that crossed over my year end date. I invoiced the client for it in the month following the year end.

1) As I understand it, the company accounts should include the sales on the basis of 'when the work was completed' not on the date of the invoice. Is this correct?

2) Does it matter much if I include the few days of work done in the following month in the company accounts for the year end date? Or do I have to split the invoice?

3) If for example, I had done a longer, fixed price, period of work (say 4 weeks) that crossed the year end, how would I split the revenue between the two company years in my accounts?

[Waldorf]

I performed a week of work that crossed over my year end date. I invoiced the client for it in the month following the year end.

1) As I understand it, the company accounts should include the sales on the basis of 'when the work was completed' not on the date of the invoice. Is this correct? YES

2) Does it matter much if I include the few days of work done in the following month in the company accounts for the year end date? Or do I have to split the invoice? Your accountant should make an adjustment in the accounts

3) If for example, I had done a longer, fixed price, period of work (say 4 weeks) that crossed the year end, how would I split the revenue between the two company years in my accounts?
I would imagine the invoice would be split on a time portion?

I would guess that if you use a spreadsheet your accountant would not even be aware of the split and the invoice would be included depending on which year you entered it on the spreadsheet?

[Taxless]

Waldorf is correct, this is an accounting issue.

Your accounting profit is calculated on the accruals basis to reflect income earned and expenses incurred, not cash received and paid out so that you arrive a "fair" indication of the profit earned in the period.

I would disagree with the final comment as any competent accountant would identify items straddling the year end. It's part of what you pay them to do.

[zedAccounts]

Just send one invoice but split the amount rec'd between the two years (i.e. 2 sales entries instead of 1)

ZED.