Cash Basis P&L Report includes parital amounts from unpaid invoices

Greg_C · ‎June 30, 2021

My "Cash Basis" P&L report is including partial amounts from unpaid invoices. As an example, an invoice with a $5.00 Delivery Fee has $2.08 showing up on the "Cash Basis" report. I cannot find a commonality between all the invoices that are doing this. Any ideas?

BigRedConsulting · ‎July 01, 2021

This will happen if you have a return/credit on the invoice, a negative line item that is not a "Discount" type item. When data is recorded in this way, it creates internal "links" on the invoice, and the credit treated as if it pays off other parts of the invoice.

Based on your example, the credit on the invoice amounts to about 42% of the invoice total before the negative line item(s).

For example, if you create an invoice for a product, and then add a line for a return of another product (presumably that the customer purchased on a prior sale), that return is considered 'final' - the end of the line for that transaction, and so it acts as a payment against the invoice total.

The same thing would happen if that return was entered as a credit memo and then the credit memo applied to the invoice.

This is true except for Discount type items, which are treated differently and considered part of the sale, and not as a return / not as something to apply to the sale before actual payment is received.

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AlexV · ‎June 30, 2021

Hello Greg_C!

Thanks for reaching out to us. Let me explain how the "Cash Basis" works.

The Cash method of accounting shows all the money when it moves in and out of your business. This includes the partial payments from the invoices. Although the invoice is still open or not fully paid, the partial payment will still be included on the cash basis of P&L since you received the money already.

You'll want to check this article: Differentiate Cash and Accrual basis. This will help you to fully understand the difference between the two accounting methods.

In addition, please check these links if you need more financial reports:

Leave a comment below if you have other concerns. I'll be here!

Greg_C · ‎June 30, 2021

Thanks for being so responsive, Alex. I don't think I was clear in my original post. There has not been any payment whatsoever applied to the problematic invoices. Where I was referring to "partial" is in reference to the amounts showing up on the P&L for the items which appear on the invoice. I understand cash basis reporting and would not expect to see any amounts from an unpaid invoice appearing on a cash basis report. Not only do I have amounts appearing, they are not the full amount of the item as it appears on the invoice. So ... I have an invoice with no applied payments which has a $5 delivery fee on it and on the cash basis P&L I am seeing $2.08 of that $5.00. Two questions in this issue: 1) Why is an invoice with no applied payments appearing on a cash basis report? And, 2) Why is only $2.08 of a $5.00 item from the invoice appearing on the report?

FritzF · ‎June 30, 2021

Thanks for getting back to us, @Greg_C.

You should only see income if you have received cash and expenses if you have paid cash on a cash basis reporting.

Since the unpaid invoices are still showing in the Profit & Loss report, I recommend running a rebuild and verify on the company file to check for data damages. Data damage can cause these types of issues with the reporting in QuickBooks Desktop (QBDT).

Here's how to do it:

In QBDT, go to the File menu at the top.
In the drop-down, select Utilities, then Rebuild Data.
On the QuickBooks Information window, click OK. Follow the onscreen steps to save a backup.
The Rebuild will continue automatically following the backup.
When the Rebuild finishes, tick OK.
Go back to the File menu. Then choose Utilities and pick Verify Data this time.

Click OK if QuickBooks doesn't find any problems. Otherwise, tick Rebuild Now.

For more information about fixing data damages in QBDT, check out this article: Fix data damage on your QuickBooks Desktop company file.

Please don't hesitate to leave a comment if you have any further concerns or issues. I'll be more than willing to help. Have a wonderful day!

Greg_C · ‎June 30, 2021

@FritzFthank you! I've gone through these steps (more than once) and still have the issue. Very perplexing.

LieraMarie_A · ‎June 30, 2021

Hi there, @Greg_C. Happy to chime in.

I've got some additional information and troubleshooting steps to share with you. First, let's take a closer look at your report.

From the Profit and Loss report, modify the date to All.
Select Cash as the report basis.
Double-click the amount to bring up the invoice.
Verify its status and delivery amount.
Once verified, select the Close icon.

If it's unpaid and the amount is incorrect, follow these steps to perform a mini repair on your software:

Close your QuickBooks.
Download the QuickBooks Tool Hub file.
Open the QuickBookstoolhub.exe file. It gets saved in the download folder.
Follow the on-screen steps to install and agree to the terms and conditions.
Click Finish.
Double-click the icon on your Windows desktop to open the tool hub.

From there, let's run the Quick Fix my Program tool from the Tool Hub.

In the QuickBooks Tool Hub, select Program Problems.
Select Quick Fix my Program.
Start QuickBooks Desktop and open your data file.

If you're still getting the same issue, you can follow the additional steps outlined in this article: QuickBooks File Doctor.

Feel free to visit us again should you need more help with running reports. I'm always available to help

BigRedConsulting · ‎July 01, 2021

This will happen if you have a return/credit on the invoice, a negative line item that is not a "Discount" type item. When data is recorded in this way, it creates internal "links" on the invoice, and the credit treated as if it pays off other parts of the invoice.

Based on your example, the credit on the invoice amounts to about 42% of the invoice total before the negative line item(s).

For example, if you create an invoice for a product, and then add a line for a return of another product (presumably that the customer purchased on a prior sale), that return is considered 'final' - the end of the line for that transaction, and so it acts as a payment against the invoice total.

The same thing would happen if that return was entered as a credit memo and then the credit memo applied to the invoice.

This is true except for Discount type items, which are treated differently and considered part of the sale, and not as a return / not as something to apply to the sale before actual payment is received.

Greg_C · ‎July 02, 2021

@BigRedConsulting bingo!! Thank you! You’ve resolved my issue.

Greg_C · ‎July 02, 2021

@BigRedConsulting bingo! Thank you!! This was it and my issue is now resolved.

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Cash Basis P&L Report includes parital amounts from unpaid invoices