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If I get a freelance assignment, at the point of the assignment I expect the income for the work to eventually be received. But there is no invoice yet so I don't think of it as a receivable.

What is a good way to track this expected income using Quicken (Home & Business version)?

One thought I have is to create a cash account where the amount could be entered, then transfer the amount out of that cash account once the invoice (and receivable) is created.

Any thoughts much appreciated!

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You are right on track with your idea of setting up a separate account for invoiced income.

Create a new account with the type other asset and call it "Receivables" (or something similar). Every time you invoice a client, enter a credit to this account with the amount of the invoice. Once the client pays and you deposit a check, enter a transfer from the "Receivables" account to the bank account.

EDIT

I overlooked that you wish to account for not-yet-invoiced income. I think that's a bad idea. It will become confusing and will give you the false sense that your financial condition is better than it really is. There are plenty of stories about businesses that have stellar sales, but fail because of lack of cash flow (the business' bills become due before it gets paid by its own customers).

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  • Yes, tracking invoiced expected income as receivables is easy in Quicken. I believe that what I am looking to track may be called "work in progress" in some businesses. We're not worried about misreading our cash flow because Quicken allows us to customize reports to exclude accounts, so in the cash flow report we could just exclude the uninvoiced amounts. – Shannon Wagner Mar 8 '12 at 12:02
  • You could have another other asset account named "Expected Income" whose balances are transferred to the "Receivables" account once an amount is invoiced. – Tony the Pony Mar 8 '12 at 12:26

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