Question for managers etc- I'm writing an annual report (until now I've only done monthly reports) and I'm not sure how to handle the financial piece. What do I do about all the open invoices and outstanding payments? How do I give a fairly accurate picture of our bank balance when some May/June expenses and bills won't be closed out until the end of the summer (our fiscal year ended June 30th)? We don't include these items in our annual budget since they all balance out in the end but at any point in time they are usually skewed towards us at a deficit while we're awaiting payments. Thanks!
You can run your reports in "cash" basis instead of accrual.
If you need to present reports that actually show what is REALLY in your bank accounts and not what you are expecting to receive or pay, then run the reports in cash basis and they will show only amounts once money has actually moved from one place to another.
@MarshallA, this is a good question and @abacon is right on the money. Are you using cash or accrual basis accounting for your books? Who are you reporting these financials to, is it internal or external?
Your business is reporting taxes a particular way based on whether you're using cash or accrual basis accounting, but you can run reports in QuickBooks with either method to see the actual money you've received from income and paid for expenses (cash) or the actual money as well as anticipated income and expenses (accrual).
Thanks for the suggestions- I realized what we want is an accounting on an accrual basis.That meant I had to get all our accounts up to date and get all my bills entered and invoice dates changed so I could see more clearly what are the accruals from this past year and what are for the upcoming calendar year and now I've got a better picture of everything. Thanks all for the guidance!
I am very happy to hear you're moving along. It's a challenging concept and a complicated one at that! But it sounds like you have a firm grasp on your reports.
I encourage you to join our conversation on cash vs accrual method accounting, it's gotten very interesting and deep. These are industry experts and CPAs discussing the pros and cons of each, they know it's complicated!