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Let's elaborate on some details when recording invoices and payments in QuickBooks, Mab31.
Sometimes, you may find it confusing why a different amount of income is reflected and doesn't match the payments you've entered. The main reason why this is happening is because of the accounting method that you're using.
With the accrual method, your business reports income and expenses for completed and pending transactions that show up on your financial report. And that is happening in your case where it shows the full amount of 5000 as income when your customer only paid 500. But, if you use the cash method, your business reports the income and expenses for completed transactions.
Aside from that, when running the Profit and Loss report, for invoices and received payments, the revenue information is contained in the invoice. While the expense is tracked by the bill and bill payments. At the same time, the cash basis reports will also use the invoice or bill date.
You'll want to choose the correct accounting method when running the P&L report. To do that, follow the steps outlined below:
- Go to Reports (Take me there).
- Open the Profit and Loss report.
- Select Customize.
- On the Customize report window, set the Accounting Method to how you want the income/expense report.
- Hit Run report.
Furthermore, you can use this guide to complete year-end tasks and end of-year smoothly, I've added this article for more details: QuickBooks Online Year-End Guide Checklist.
Reply to a comment below if you have any questions when running financial reports. I'll be one post away if you need further assistance. Have a nice day!
