Enter your idea

Problem: Overpayments are treated inconsistently in cash-based reports. Let's say you receive a rental cash payment of R5000 in May in respect of rent for June that R5000 will be in May month cash report. However, let's now say the tenant pays R5500 (R500 overpayment) in May in respect of June. The R5000 will be included in may cash report and the R500 is included in June cash based report. This doesn't make sense and would seem that the accrual principle (instead of cash accounting) is being applied to the R500 (matching based on invoice date rather than cash payment date).

This seems wrong as if all transactions were treated as overpayment is treated there would be almost no difference between cash and accrual based report...

Solution: Cash is cash, cash report for a given month should only include cash payments made in that month (i.e. reflected in the bank account between the 1st and last day of the month). I.e. overpayments in cash based report should be included in the month they were paid for and not in the month they accrued (invoice date)