Cash based account and P&L reports

JRM

I have a client who is a personal trainer sole trader. His accounting is done on a Cash basis.
One of his client's pays for 16 sessions in advance (2 sessions a week for 8 weeks). I create a receipt for the total amount on the date it is paid into his account. As there is no invoice to put this amount against a credit note is created for the amount and as each session is done an invoice is created and I pay this from the credit note, therefore, the amount is split across 16 invoices and generally over 2 months, possibly 3 depending on when he pays it.

My understanding with cash based accounting is that this money is accounted for on the date of receipt and not the date of invoice. Why then is the profit and loss reports including it on the dates of the invoices?

For example, cash $1040 received into bank on 3rd June. This is used to pay invoices in June $520 and July $520. I would expect that the $1040 would be included in the June P&L report but it isn't. Only $520 is in the June P&L and the other $520 is showing in July P&L.

I want the P&L to show it in the month it is receipted not invoiced. Can anyone explain this to me?

JRM

Just another note, I use the profit and loss reports to work out my client's income for his personal income tax. Previously I would have included $1040 receipted in June as part of that year's income. Do I now have to say he earned only $520 in that year and $520 in the next financial year even though he actually received the money in the current financial year?

Thanks,

JRM