We have a client who invoices for training services.
They raise their invoices in advance (i.e. 2 months before the training when the training is booked). In the bookkeeping this shows as a sale and VAT due (as they have raised the invoices). We have come to do the year end and asked the client for a list of sales invoices that relate to services that will be performed after the year end - as they need to be recognised in the accounts during the period that the services are performed.
The client is arguing saying that they should be recognised when they are invoiced as they are non-refundable and the client is committed to paying the invoice.
My argument is that they need reducing out of sales and shown as a liability - am I being thick? How do others advise their clients to process items such as this in the bookkeeping? Raise a quote then convert to a sale when the service is performed? Or raise a sales invoice but then manually adjust in the accounts process?