Hello, I want to start using the Enter Bills feature as I have just now learned about it. In the past I paid the previous months bills in the current month which I now know does not produce an accurate P&L. My question is: can I switch to using the Bills feature without one month showing an inflated amount in the expense account or is that just how it will have to be for that one month?
For example: In March, I paid vendors X, Y & Z a total of $10K for products I actually bought/received in February. So now in March if I start using bills (which I understand will show the expense in March even if I pay it in April) and records bills to those same vendors totaling $8K, will my P&L for March show expenses of $18K?
Thanks in advance for your time.
Thanks for checking in with us, LILE.
When running the Profit and Loss report, you'll only see the Bills for March (either paid or unpaid) if we use the Accrual Report Basis option. This means all the March transactions that have March period for both Date and Bill Due will show in the report. However, if we run the Cash Report Basis in the report, it will include February transactions that have March Bull Due period in the report.
to learn more about the difference between Cash and Accrual basis and how to set them as preferences in QuickBooks Desktop for Windows, see the Differentiate Cash and Accrual basis article. Just in case you'll need to customize your Profit and Loss report, follow the steps and details in the Customize company and financial reports article.
Feel free to visit our Expenses and vendors page for more insights about managing your vendor transactions.
I'm just one post away if you need a hand with creating recurring payments or any QucikBooks related. Just add the details to your reply and I'll be there to address them for you. You have a good one.
Thanks for your reply. I just want to be sure. You stated:
"This means all the March transactions that have March period for both Date and Bill Due will show in the report."
As a test, I entered and paid a fake bill as follows:
Payment Terms: Net 30
Bill Due: 4/30/21
Pay Date: 4/10/21
For the P&L date period of 3/1/21 - 3/31/21, the bill shows up on Accrual basis but not on Cash basis.
This fake bill had a March Date but an April Due and Pay Date. I'm just not understanding which fields drive the report. Does the Date field determine if it appears on the P&L for the respective period? The Date on this bill was in March, the Pay Date was in April.
Thanks for coming back to us, @LILE.
The transactions will show on the accrual report when the bill is entered. This means the date period will show as of March.
I've also included this link about the difference between cash and accrual: Differentiate Cash and Accrual basis.
Also, I encourage checking our Help articles page to learn some tips and tricks in managing your QBDT account. From there, you can read great articles that can guide you through the steps by steps process.
Drop a comment below if you have other questions. I'm more than happy to help.
I appreciate you for taking the time in clarifying us, @GBTH.
Rest assured my colleague will update her post and notify the appropriate user.
Moreover, I want to ensure you get the most out of your QuickBooks Online (QBO) account. In case you need to learn some pointers and best practices, you can always visit our QuickBooks Support page for guidance.
Keep me in the loop if you have other concerns managing your account. I’m always around to back you up. Have a great weekend!