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We received a great question from a user today - how does Outright handle situations where a customer hasn't paid and likely won't. In the customer's words, how do you "take a loss?"
Unfortunately, for this situation, you can't take a loss against other income or enter a deduction for the lost time using Outright. Here's why: Outright is based on the cash method of accounting (yes, we're using more of that accounting mumbo jumbo here, but better here than in the actual program:-) That means that you only report income when you're received payment. And you only report expenses when you've spent the money. This is the preferred way for most entrepreneurs to handle their tax records - how many people want to pay taxes on money they haven't yet received?
Well, in this case, if you haven't been paid, it means there's no income to report. There's a good writeup in the Ernst & Young Tax Guide that better explains the details.
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