I run an online subscription-based service.
The accounting is accrual-basis.
At the end of every month the processor issues and sends a statement in which all settlements are listed. Refunds and chargebacks are also listed, however, some of the chargebacks apply to previous months' transactions. As long as those chargebacks are at the same year, it should not affect the reporting, however, what happens when a chargeback for a transaction occurs (and deducted by the processor) in the next/following year?
On the 1099 form the processor doesn't show any deductions but just the gross sales.
I collect and post all deductions and deduct them from the gross sales at the end of the year.
But what should I do about those deductions that come in the next year?