How to handle payment issue on taxes

[booksnthings]

I have an irritating freelance issue and I want to make sure I handle it correctly on my end. In 2025, a client didn't pay one of my invoices in full, and after a lot of back and forth, agreed they needed to correct it, and then instead of paying me the difference owed, paid out the whole invoice in full. I let them know right away. They got back to me this year and instead of me transferring back the extra payment, told me they wanted to just take the balance out of my next invoices for them.

How do I go about declaring this correctly on my taxes? Should I go by the "Zuflussprinzip" and include the "extra" payment I received in 2025's declaration? Or, since that money is technically being applied to work I've now done in 2026, should I include it on 2026's taxes? I know it would be easiest to ask an accountant, but I usually do my own taxes, which are not typically this much of a headache. So if anyone has any insight into this, it would be most appreciated!

[Eric7]

There's a good chance that Panda will correct me, but...
...as a freelancer, the date of payment is relevant so the full amount paid would be declared in 2025.
You should have 2 invoices though IMO. One for the full amount and one for the reduced amount initially paid.
Or if they were paid with the same bank reference (Verwendungszweck) then one big invoice for the total amount paid.

If you were a GmbH, you declare the money as earned as soon as the invoice is sent.