Hello All,

I have a tricky issue and don't know how to explain it well, so I’ll try my best to describe it in details.

My business is online based and working in web development business, however if a customer approach me to develop a website I send the request to a freelancer to develop the website which make the freelancer invoice is a cost of goods sold.

Now I have couple invoices generated in 2014 and I received a partial payment for these invoices in 2014 too however the full payment made by the customers in 2015 which now I should now pay to the freelancer invoice for a service made in 2014, so the payment for the freelancer made in 2015 which make a business expense under COGS in 2015 P&L statement but the deal pertained to deal made in 2014 is this correct?

Personally I feel not, because since I start 2015 I made couple deals with a profit like $100K but since 2014 expenses made in 2015 with total of $150K made my position in loss !

So how can I resolve this in a proper way? ( I thought of changing the freelancer payment date to 2014 but this will lead to confusion in my banking accounts due to date difference).

Looking forward to hear from you

Thanks

Abdulrahman