Can you explain how Sales and Accounts Receivable are recognized when I invoice my customer?
When you create an invoice, that invoice books the Sale (and records the Accounts Receivable that your customer owes you).
Then when you receive payment of that invoice (cash inflow/deposit to your bank account), you'll want to match that invoice to the bank deposit. That matching will record this cash inflow as a reduction of the Accounts Receivable since your customer no longer owes you that $.
*Note if you mistakenly categorize this cash inflow (which was the payment you received for a customer invoice) as a Sale, then your Sales will be double counted: since the invoice booked the Sale and now the cash inflow is also booking a Sale. Also, your Accounts Receivable will be overstated since this cash inflow payment you received is not reducing the Accounts Receivable balance.
Here's the accounting explanation:
In a double-entry bookkeeping accounting system, every transaction is recorded in at least two accounts (a debit and a credit). Therefore, here are examples of how both sale and payment received transactions are recorded:
1. You made a Sale on Jan 1st by invoicing your customer. The sale is recorded on Jan 1st. At this point, your customer owes you $100.
This transaction increases the balance in your Accounts Receivables (A/R) account since you have a Receivable from your customer, that they'll need to pay you.
2. Your customer pays you by sending a bank transfer to you or writing a check that you deposit to your bank account on Feb 4th. Now your customer no longer owes you $100 since the payment has now deposited to your bank account.
This transaction decreases the balance in your Accounts Receivables (A/R) Clearing account since you no longer have a Receivable that your customer owes you.
Another way to think about it is that with these two transactions on Jan 1st and Feb 4th, the Accounts Receivable transactions wipe each other out (it increases then decreases). You're left with a Sale and Cash in your bank!