Profit and loss is not correct if we invoice prior getting a bill

It's indeed a challenge when you're facing discrepancies with your data, and I'm here to help you with this, pacman.

The factor causing this issue to occur is the timing of initiating or recording sales before the actual bill is entered in QuickBooks Online (QBO). Especially, if you have negative inventory for this specific product and you've recorded a customer's purchase before entering a bill once you've restocked the item.

It's important to note that the best way to handle potential expenses for inventory purchases is to record a Purchase order (PO) before tracking your sales in QBO. After the PO is accepted and the items are received, you can then convert the PO into a bill.

To add the saved PO to a bill, refer to this step:

1. Go to the + New icon, and select Bill.
2. Choose the appropriate Supplier.
3. Once the available PO appears, Add them to the bill.
   
4. Once done, click Save or Save and close.

In this manner, the platform can assess the actual price when the item was bought, the recorded selling price, and the profit it generates when you've initiated a sale. This practice can help you maintain accurate expense, income, and inventory records moving forward.

Meanwhile, if you're using Cash accounting when generating a report, you can consider switching to the Accrual method. The Cash basis displays income and expenses after receiving a payment or paying your bills. Meanwhile, the Accrual accounting shows income and expenses after you initiate sales or expense transactions in QBO.

On the other hand, you seek assistance from an accounting professional when fixing your 2 years of historical data with discrepancies. In doing so, you'll have to review all your transactions where the sales occurred before you've recorded the bills using the Profit and Loss report.

Furthermore, you'll also have to double-check if your past invoices include items that are short in quantity vs the quantity of the product on the sale, as it could mess up your entries. With this, you can utilize the Inventory Valuation Detail report to compare your sales items against their actual quantity when the invoice was made.

Finally, I'm attaching this article that might help you in the future: Use reports to track cash flow in QuickBooks Online. It can guide you in precisely tracking and managing your financial cycle in the platform.

If you have more questions about managing your finances on the platform, click the Reply button. We're always here for you.