Question

How to filter out journal entries showing up in cash basis P&L report?

Forum|Forum|7 years ago
February 6, 2019
35 replies
136 views

I am trying to run a cash basis P&L report in QBO. We have made journal entries for accrued expenses which are not cash but are showing up in the cash basis p&l report. There doesn't seem to be an option to filter on transaction type so that I can exclude these non-cash journal entries. Can someone point me in the right direction?

QuickBooks Online

T

Teri11_2

Level 2

Think you need to input those accruals via AP which is excluded from cash-basis reports.

V

VFAKathyAuthor

Thanks. QBO doesn't give you the ability to accrue expenses to a separate A/P account so that you can actually see what's been accrued. How then to handle accrued bonuses, depreciation, and other such expenses that don't normally flow through A/P?

A

Anonymous

You can't really. Cash basis does not mean cash flow.

All accounting events in QB are by their nature cash basis except for AR and AP transactions.

So, for example, a credit card charge is cash basis no matter if you ever pay the credit card bill. Similarly a check is cash basis whether or not it ever clears the bank.

Similarly a transaction to record interest within a loan account is a cash basis event, though no cash ever changes hands.

V

VFAKathyAuthor

That's frustrating. What transaction do you use to record depreciation, then?

T

Teri11_2

Level 2

Depreciation would be general journal entries, but that is not accrued. That is just excluded from cash flow calculations.

M

Malcolm Ziman

Level 4

@VFAKathy wrote:

I am trying to run a cash basis P&L report in QBO. We have made journal entries for accrued expenses which are not cash but are showing up in the cash basis p&l report. There doesn't seem to be an option to filter on transaction type so that I can exclude these non-cash journal entries. Can someone point me in the right direction?

here is a discussion about this:

https://quickbooks.intuit.com/community/Reports-and-accounting/Cash-Basis-Journal-Entry/m-p/197591#M3288

V

VFAKathyAuthor

Thanks. I saw that thread. Other than running everything through a single AP account (which is really not correct and sends incurred but uninvoiced "bills" through to bill.com for payment prematurely), there is no good workaround for this problem it seems.

M

Malcolm Ziman

Level 4

@VFAKathy wrote:

Thanks. I saw that thread. Other than running everything through a single AP account (which is really not correct and sends incurred but uninvoiced "bills" through to bill.com for payment prematurely), there is no good workaround for this problem it seems.

Just curious; why do you want to run a cash basis P&L if you posted an accrual JE?

T

Teri11_2

Level 2

I believe there is a long-time misunderstanding (30 years I have seen) that QB does cash or accrual-basis accounting. NO accounting system can DO cash vs. accrual-basis accounting. Accruals are accounting ENTRIES you make to record expenses in the proper accounting period as incurred vs. when cash is paid.

QB allows you to run reports that exclude ENTRIES to AP or AR, which excludes any not paid in cash yet. Assume system can tag those entries to exclude AP and AR accounts and the other side of those entries so then you do not see AP or AR balance sheet accounts and also do not see the income or expense accounts.

That explains why Journal entries of any kind, cash or accrual-basis will always show on your QB reports.

L

lucyatHC

I am making journal entries that include AP accounts, but the cash report in QuickBooks does NOT exclude those transactions.

Our business has subcontracts on projects. We often invoice our projects for parts of subcontracts for which we have not yet received bills. So we might invoice 80% complete on a task that includes subcontracts, and not all of the subcontractors have yet sent their 80% bills to us. When we receive the payment for our 80% invoice, I would like to make a journal entry for the amounts of that invoice that will be due to our subcontractors as soon as we receive a bill from them. I created a new AP account called Subcontracts Payable to track these amounts (which are quite substantial for our business).

When I create a journal entry to the Subcontracts Payable (AP) account, QB includes it on the cash P&L. We use cash accounting for tax returns, so this makes our cash reports less reliable.

We are using QuickBooks Desktop. I have been unable to find a work around for this.

C

CharleneMaeF

QuickBooks Team

Thanks for the detailed information, lucyatHC.

When creating a journal entry, AP accounts won't appear on the Profit & Loss Cash report, though the amounts in the transaction will show on the affecting expense account you used in the payment.

Also, you can set your company preferences to cash as your report basis.

Go to the Edit menu.
Select Preferences.
Click Reports & Graphs, then go to the Company Preferences tab.
In the Summary Report Basis section, select Cash.
Select OK.

The Transaction Journal report provides a more focused view of the amount and accounts which aren't visible in the transaction you created.

I'll be around to help if you have additional questions.

Oana Palade

I have the same problem, and I just wanted to check when QuickBooks will catch up with its competitors and distinguish non-cash transactions from cash transactions. Currently, you are forcing your users to keep depreciation and other calculations outside QuickBooks in Excel, like 20 years ago. Deprecation GLs will never be part of cash basis transactions, so don't understand why is that hard for you??!

A

amandafa

Xero has the ability to filter out closing accrual JE's. Why can't QB do that too?

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