Question

PROBLEM: QB records income on date of invoice, not date of payment

Forum|Forum|7 years ago
March 7, 2019
8 replies
50 views

I've been using QB online for a few years, but only became aware of the issue recently. I normally send an invoice to a client through QB. Oftentimes, client takes a few weeks to pay the invoice, usually by mailing a check which I deposit into the business bank account. When I do bookkeeping (once a month), these "Banking" transactions show-up under Banking, and I simply match them to the invoices.

I had recently discovered that QB actually marks the invoices as paid not on the date the funds were deposited into the bank account, but rather on the date the invoice was first generated.

This is a gross mistake and undermines all bookkeeping logic. It's especially problematic for invoices sent late in December, but paid in January. In this scenario QB would erroneously report the income for the previous year instead of the following year when the funds were received.

Can someone advise me on how to make the engineering team aware of this issue? I'm surprised it hasn't been brought up before.

Many thanks.

QuickBooks Online

john-pero

Level 12

This is not an engineering error, it is as designed and follows GAAP for Accrual Basis accounting. In accrual, income is earned when service is provided or invoice is generated, not when or even if you are paid. An invoice dated 12/31/18 but paid 2/1/19 is last year's income plain and simple under accrual rules.

In Cash Basis accounting you are not credited with income until the day you receive payment. You probably are a Cash Basis business and need to change the reports you are viewing. Nearly every report has a toggle between accrual and cash. Pull up a report where you know invoice is last year but payment this year or different months. Toggle between views and you will see the difference.

You can also select which type you report taxes as but it won't change the default view of reports, which is accrual. Your dashboard also only reports accrual.

Underneath, inside the program, QB is accrual based accounting with the option of cash basis reporting l. It is not an error, not a glitch, and you won't get anyone to change it.

M

Malcolm Ziman

Level 4

@john-pero wrote:

You can also select which type you report taxes as but it won't change the default view of reports, which is accrual.

No, accrual is not the default. The default is what you selected in Settings

john-pero

Level 12

@Malcolm Ziman see my screenshots an d, as qbteachmt would say "learn from my input"

Cash accounting properly set and has been for 3 years but every time a report is opened it opens as Accrual. (does so in desktop also)

S

SarahBerry

I am having the same issue, even when my report is selected as Cash Basis. I would appreciate any help or suggestions on what report would list the detail of the accounts/items paid on each invoice, listing the date as the PAID date, not the invoice date. I can 'cheat' and make the invoice date the paid date, but this will not help me when a customer makes two partial payments & would like a history of how their payments have been applied.

C

ChristieAnn 11

Level 9

Welcome to QuickBooks Community, SarahBerry.

I suggest running the Sales by Product/Detail report and customize it. This way, it will show the detail of the accounts/items paid on each invoice and the paid date associated with two partial payments. And, how their payments have been applied.

Here's how:

Click the Reports menu on the left panel.
Choose Sales by Product/Detail on the search bar.
Click the Customize button.
Go to the Filter dropdown menu. Then, choose Transaction Type, Distribution Account, Product/Services, and A/R paid.
From the A/R paid, choose Paid.
In the Transaction Type, choose Invoice and Payments.
From the Distribution Account, choose specific accounts.
Hit the Run report button. Make sure that the accounting method is set to Cash basis.
Choose a specific date range and click again the Run report button.

For additional information on how you can customize a report to focus on the details that you want to view, you can click this article: Customize reports in QuickBooks Online.

Please refer to this article to see which reports are available for your version of QuickBooks Online: Reports included in your QuickBooks Online subscription.

You can always mention me if you need other help with reports inside QuickBooks. I'll be around for you!

S

SarahBerry

Thank you. This is closer than what i have found so far, but still is not apparently what i need.

I am using this software for property management. The 'customers' are my tenants, and the items are various rent and reserve payments due monthly.

I am using desktop, so maybe that affects your helpful reply?

I don't have a Sales by Product/Detail. I have one by item detail, so i selected that instead. None of my filters or accounts showed a distribution account, so I don't know that i have that either. At this point i need to just get some reports so I can move forward with some year end reporting, so I am at the point where I am going to export the entire thing to excel and manually change each transaction date.

I am new at using QB, but fancied myself a fast learner. Any other suggestions are welcome in the meantime!

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