Re: [SL] How to account for pre-payments

[Mark P. <mar...@mo...>]

On May 6, 2009, at 8:34 PM, Paul Tammes wrote:

> The only reason I can come up with for NOT sending invoices and yet  
> to ask
> for payment (advance, whatever) is to postpone taxation: once he  
> invoice is
> sent, tax is due. So let us wait as long as possible to send tjhe  
> invoice.
>
> At this point in time, with people and businesses going bankrupt  
> every so
> often, I would be very hesitant to pay with or without an invoice,  
> but not
> having an invoice (or reminder if cash is low) would not prompt me  
> to pay
> anything whatsoever.

Well, that certainly makes sense. In our locale, invoices are not  
taxed when they are created. At least for the moment, we are allowed  
to tally the sum at the end of each quarter or year, then send a tax  
contribution.

I have an associate in Mexico who was very hesitant to send me an  
invoice. Like you, I am hesitant to send money without an invoice or  
similar. His problem was the tax was due at the moment the invoice was  
created. So, my associate would be out of pocket for taxes paid  
whether or not he ever collected on the invoice. It will come as no  
surprise that we made other arrangements so that payment of tax  
demanded coincided with real income.

  -- Mark


Mark Phillips

On the web at www.mophilly.com
On the phone at (619) 444-9210