When you run a cash basis profit and loss report, it shows income from payments received prior to the date range on the report. For example,
The cash basis P&L shows half of the income in February (date of invoice) and half in March (date of the final payment.)
When a payment date precedes an invoice date, cash basis reporting realizes the income on the invoice date instead of the payment date, as shown in the example above.
Note: If you choose to change an invoice date or a payment date to change how the information displays on your profit and loss report, it could change financial reports from other periods. Consult your financial adviser before making any changes.