Cash basis P&L and revenue

Let me provide some information about Cash Basis reporting, Myoung.

The Cash basis report only shows income if you have received cash and expenses or if you have paid cash. However, when paying the invoice (12/28/2019) before the invoice date, it will not reflect in the Profit and Loss Cas Basis report. This will show on the invoice date of January 01, 2020.

If only the invoice is dated within the same period as the income statement, the dates matter for the reporting. Where the payments applied to invoices result in the Cash Basis reporting for the payment date and not the invoice date.

Since you receive the payment before the invoice date, it results in negative A/R reporting. In this case, it would be better to consult your accountant so that they will give you any advice on how to best handle this one in QuickBooks.

For more details about Cash and Accrual basis, check out this article: Differentiate Cash and Accrual basis.

I've got a link here where you can find articles about managing your reports: Reports gathers info from setting up reports to customizing, running, and sharing reports.

Fille me in if you need a hand with reconciling your accounts or any QuickBooks related. I'll be here to ensure your success. Keep safe and healthy. 

I am an accountant so let's talk about it from an accounting perspective.

If a customer makes a payment on a account where there is no invoice - the payment should show up as a credit on their account. This is treated more like a deposit rather than a payment. This happens in December.

The invoice is generated in January and the credit is posted to the invoice in January - generating the revenue.

Some might say that this the accrual method not cash method but in reality for accounting purposes you can't really generate revenue prior to the invoice being created regardless of your method of recognizing revenue or at least I would not do it. I think Quickbooks knows this.

For tax purposes the IRS would say the revenue was generated when you receive the money but that is a story for another day.

I have a followup question to the Quickbooks team.

I am a Cash Basis reporter.

I have Dec 2019 invoices that are paid in jan 2020. They appear in the Jan 2020 P& L Standard Report, which is correct - but they do not appear in the P&L Detail Report. Why?

In response to your question, it is my understanding that when running detailed reports, they always default to Accrual Basis.  That might be why your transaction shows up in the cash basis summary report, but does not show up in the detailed report.