How to filter out journal entries showing up in cash basis P&L report?

Think you need to input those accruals via AP which is excluded from cash-basis reports.

Thanks.  QBO doesn't give you the ability to accrue expenses to a separate A/P account so that you can actually see what's been accrued. How then to handle accrued bonuses, depreciation, and other such expenses that don't normally flow through A/P?

That's frustrating. What transaction do you use to record depreciation, then?

Depreciation would be general journal entries, but that is not accrued. That is just excluded from cash flow calculations.

But any journal entry shows up in the cash basis report. And depreciation is not cash. So how do I record it so that it shows up on accrual basis but not on cash basis. Honestly, QB is crazy. Plus you only get ONE A/P and ONE A/R account so that you can't segregate these items that need to be reflected separately on the balance sheet so my auditor can tell what they are...

Yes, that is correct, no filter on JE's and single accounts for AR & AP, but that is all you usually need.  Depreciation is not cash but is also not accrual, is actually opposite since you pay cash in advance so is more like prepaids, where the unused portion of the cost remains on balance sheet. I agree if you need to accrue, separate accounts are helpful. May I ask, are you accruing for year-end or for a month end and which auditors are you expecting?  I may have some suggestions to help you out.

Agree depreciation is more like a prepaid. We are currently doing at year-end. Would love to know your workaround! Thx

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@VFAKathy wrote:

I am trying to run a cash basis P&L report in QBO.  We have made journal entries for accrued expenses which are not cash but are showing up in the cash basis p&l report. There doesn't seem to be an option to filter on transaction type so that I can exclude these non-cash journal entries. Can someone point me in the right direction?

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here is a discussion about this:

https://quickbooks.intuit.com/community/Reports-and-accounting/Cash-Basis-Journal-Entry/m-p/197591#M...

Thanks. I saw that thread. Other than running everything through a single AP account (which is really not correct and sends incurred but uninvoiced "bills" through to bill.com for payment prematurely), there is no good workaround for this problem it seems.

Not really a work-around since one is not needed at this point for 12/31/18 year-end close.  Usually the reason for an "accrual" account separate from AP is so you can tell what is actual invoiced AP vs. a JE you estimated, often because you want to reverse that JE when the real invoice arrives which may be a slightly different amount.  However, it is February now, so you probably have invoices for all you would have accrued for 2018, right?  So just input those actual invoices into AP and likely no estimates are needed. Just be sure to date the expense entry 12/31/18. 

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@VFAKathy wrote:

Thanks. I saw that thread. Other than running everything through a single AP account (which is really not correct and sends incurred but uninvoiced "bills" through to bill.com for payment prematurely), there is no good workaround for this problem it seems.

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Just curious; why do you want to run a cash basis P&L if you posted an accrual JE?

Thanks. How do you recommend handling the depreciation entry? I've always done a J/E for that but I don't want it to show up in the Cash Basis expenses. 

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@VFAKathy wrote:

Thanks. How do you recommend handling the depreciation entry? I've always done a J/E for that but I don't want it to show up in the Cash Basis expenses. 

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Why not?

Because depreciation isn't a cash expense. The cash was expended years ago when the assets were purchased. 

I am guessing that you do accrual-basis accounting on your books and cash-basis for tax returns is the reason for these questions. So one reason depreciation is not part of this cash vs. accrual-basis discussion is because depreciation is already calculated differently for taxes vs. your GAAP books.

I am having the same issue - it's not only depreciation but also all accrued journal entries. Please advise on the best way to fix this.

Thanks!

Thanks for joining this conversation, ifeprofitlineusacom.

I can share some insights on why the journal entries are showing in a cash basis Profit and Loss report.

The journal entry is a transaction that directly hit your account. With that said, it will always show on the Profit and Loss report regardless if it's cash or accrual basis.

Right now, we don't have an option to filter the journal entries on a cash basis Profit and Loss report.

Check out this article for more details about the accounting method in QuickBooks Online: Choose between cash and accrual accounting methods in reports.

That information should get you back in order. I’d be glad to help if you have other questions while working in QuickBooks. Enjoy your day.

Having a  similar issue. We make AJEs to correct A/R A/P on the accrual side such as writing off bad balances, adjusting balances, reclassing balances etc. and our accrual TB, P&L, & BS all come out right. When we go to run the cash basis excluding accrual AJEs and transactions the AJEs still pop up. So QuickBooks is not working correctly based on accounting standards, they're just not providing a work around. My answer is to run your accrual P&L and BS then do the trusted old fashioned Accrual to Cash conversion on your own for tax purposes. This will get you the most accurate Cash Basis Profit & Loss. QuickBooks should give you the option to run cash basis journal entries and accrual basis journal entries.

use QBD

Hello there, @anonymous999.

In QuickBooks Desktop (QBDT), you can set your company preferences to Cash as your report basis. This way, your Profit and Loss report will default to it when pulling it up in the Reports menu.

1. Go to the Edit menu.
2. Select Preferences.
3. Click Reports & Graphs, then go to the Company Preferences tab.
4. In the Summary Report Basis section, select Cash.
5. Select OK.

I've attached a screenshot below for your reference.

Once done, run the Profit and Loss report to verify the update.

You can customize the report so you can filter the data, add or delete columns, and even personalize the font and style. Kindly refer to this article for the detailed steps: Customize reports in QuickBooks Desktop. It also contains related articles that you can visit that covers information about reports in QBDT.

In case your referring to something else, please don't hesitate to drop a comment below. I'm just around to help.

I believe there is a long-time misunderstanding (30 years I have seen) that QB does cash or accrual-basis accounting.  NO accounting system can DO cash vs. accrual-basis accounting.  Accruals are accounting ENTRIES you make to record expenses in the proper accounting period as incurred vs. when cash is paid.

QB allows you to run reports that exclude ENTRIES to AP or AR, which excludes any not paid in cash yet.  Assume system can tag those entries to exclude AP and AR accounts and the other side of those entries so then you do not see AP or AR balance sheet accounts and also do not see the income or expense accounts.  

That explains why Journal entries of any kind, cash or accrual-basis will always show on your QB reports.