How Do I Track Non-Invoiced Income in FreshBooks?

Most service-based small businesses send invoices in order to collect their payments, so when tax time rolls around it is pretty simple to run a report and find out how much income you brought in. What if you have other sources of income? What is considered another source of income? This guide will help you understand what other non-invoiced income you may need to report and how you can go about tracking it.

Non-Invoiced Income

Any money you made through your business is considered income, regardless of if you sent your client an invoice for it. For example:

  • If you have a rental property and receive rent from a tenant, that would be considered income
  • If you sell physical products at a weekend market, that would be considered income
  • If you have a business bank account that accumulates interest, any interest earned would be considered income
  • If you received goods or services as payment (instead of cash), the cash value of what you received would be considered income

So even if you don’t have an invoice representing the income, you have to include it in your totals on your taxes.

Including Non-Invoiced Income in Your FreshBooks Account

You will need to create an invoice to represent your non-invoice income but there are many ways to keep it organized.  The easiest way is to create each revenue stream as a client in FreshBooks.  For example, you could create a client called “Checking Account Interest” and a client called “Weekend Market Sales”

Creating the revenue stream as a client in FreshBooks:

  1. Click on the “People” tab in the main bar
  2. Click the green “New Client” button
  3. You’ll need to enter an email address – you can enter one of your own email addresses. They don’t have to be unique, so all of your non-invoice income clients could have the same email.
  4. In the “Organization name” field, you’ll want to name your client after your desired revenue stream (Bank Interest for example).
  5. Click “Save” at the bottom of the page

Create an invoice representing income for that stream:

  1. Click on the “Invoices” tab in the main bar
  2. Click the green “New Invoice” button
  3. Select your ”Client” (also known as your newly created revenue stream)
  4. On the invoice you’ll want to enter the value of the income you’re recording. For example, if your interest for last month was $10.71, you would enter that as the cost and the quantity as 1.
  5. Save the invoice as a draft

To enter payment against that invoice:

  1. Click on the “Invoices” tab in the main bar
  2. Put a check in the box to the left of the invoice you just created
  3. Click the grey “Enter Payment” button just above your invoice list
  4. In the payment screen, put a check in the box beside “Pay in Full”
  5. Click the green save button

Every time, you have income from that stream, you can now create an invoice and enter payment against it. Track this non-invoice income through your reports and make tax time even easier.

about the author

FreshBooks is the #1 accounting software in the cloud designed to make billing painless for small businesses and their teams. Today, over 10 million small businesses use FreshBooks to effortlessly send professional looking invoices, organize expenses and track their billable time.