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Beachlaw
March 1, 2022
Question

Error in P&L Report

  • March 1, 2022
  • 2 replies
  • 7 views

I am not getting an error message however it seems that when I run my P&L on a cash-basis, the income line is showing income based off the date of the invoice and not the date of the payment.

 

I ran a report for Q4 2019 and the income differed significantly from my bank records. The account was previously reconciled and nothing has changed on that end, so I was unsure of the issue. I dig a little deeper and found an invoice dated January 2020 with a payment made towards the invoice in Q4 2019. The income was missing from the P&L detail. I changed the date on the invoice to reflect a Q4 2019 date and the income was then reported for Q4 2019. I know for a fact that I am running the report based on a cash basis. I have consulted with my accountant who said she has never seen this before. 

 

Is there a setting that is off? Am I missing something? Has anyone run into this error? I am not sure how to fix this and I need to run reports for our taxes and fear that everything is off and wrong.

2 replies

BigRedConsulting
BigRedConsulting
Level 15
March 1, 2022

@Beachlaw  RE: "I dig a little deeper and found an invoice dated January 2020 with a payment made towards the invoice in Q4 2019. The income was missing from the P&L detail. I changed the date on the invoice to reflect a Q4 2019 date and the income was then reported for Q4 2019. I know for a fact that I am running the report based on a cash basis. I have consulted with my accountant who said she has never seen this before."

 

This is actually how the reports correctly work: Income is counted on the latter of the payment date or the invoice date - whichever is greater.

 

The idea is that until the invoice date you didn't earn the income. You received some money, but there is no way to tell what it is for until you applied it to an invoice that you entered at a later date.

B
BeachlawAuthor
March 1, 2022

That makes sense as in most circumstanced the invoice was generated prior to payments being made, where in this case a payment was made but a final invoice had not yet been generated. So when the final invoice was generated it then moved all of the income to that quarter? Does that mean we have potentially been paying taxes on duplicate income? How can I resolve this?

BigRedConsulting
BigRedConsulting
Level 15
March 2, 2022
@Beachlaw wrote:

So when the final invoice was generated it then moved all of the income to that quarter? Does that mean we have potentially been paying taxes on duplicate income? How can I resolve this?

 

While the payment was not applied to anything there was no income reported on any dates.

When you created the invoice and applied the payment to it, then income was reported.

 

If the invoice was created and paid and dated in a prior period, then income was reported then. If you changed the invoice date, then the same income shifts to the new date (in this case of a pre-payment on a cash basis.)

Tori B
Tori BQuickBooks Team
QuickBooks Team
March 1, 2022

Hi there, @Beachlaw. 

 

Thank you for taking the time to reach out to the QuickBooks Community. 

 

Along with BigRedConsulting's response, I recommend checking your file for possible data integrity issues that can cause issues like incorrect information on a P&L report. To check your file and repair any data integrity issues, you can run the Rebuild and Verify utilities. To do this, you can use the steps I've included below. 

 

To Rebuild: 

 

  1. Click on the File menu at the top of the screen.  
  2. Choose Utilities, then click on Rebuild. 
    • You will receive a warning message to backup your company file, press OK. 
  3. Once the backup has been completed, the Rebuild will begin automatically. 

 

After the Rebuild finishes, let's run a Verify. Here's how: 

 

  1. Open the File menu and click on Utilities. 
  2. Choose Verify. 

 

Once both utilities have been completed, let's recheck the report. Please let me know if you're continuing to have issues. Check out Verify and Rebuild Data in QuickBooks Desktop for additional details about this process. 

 

I'll be sure to keep an eye out for your reply and look forward to chatting with you soon. Take care, always! 

 

 

 

 

BigRedConsulting
BigRedConsulting
Level 15
March 2, 2022

@Tori B  RE: Along with BigRedConsulting's response, I recommend checking your file for possible data integrity issues that can cause issues like incorrect information on a P&L report.

 

Nothing that the OP wrote suggests a problem with the company file or with the transactions. As mentioned, QuickBooks is behaving exactly as it is supposed to.

B
BeachlawAuthor
March 2, 2022

I really appreciate your assistance on this.

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