Thanks for the detailed information, lucyatHC.

When creating a journal entry, AP accounts won't appear on the Profit & Loss Cash report, though the amounts in the transaction will show on the affecting expense account you used in the payment.

Also, you can set your company preferences to cash as your report basis.

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.

The Transaction Journal report provides a more focused view of the amount and accounts which aren't visible in the transaction you created.

I'll be around to help if you have additional questions.

This doesn't exactly help with the problem. I need to assign an expense account to the AP transaction. I can't see another way to do it. 

The issue is that AP journal entries still show up on a cash report. You would think those would be excluded as they are for other AP transactions (bills and item receipts).

I have already set my report preference to cash. That doesn't change the functioning of the report.

I do appreciate you for keeping us updated, lucyatHC. 

Accounts Payable accounts doesn't show on the Profit & Loss Cash report but the amounts will already show on the affecting expense account you used when paying the bill. However, when you drill-down to the amount of the account, it will show a detailed list of bills affecting the Accounts Payable account. 

In addition, accrued expense are the same thing. The purpose of AP is to Accrue Expense that is to be paid later.  Journal entries avoids the distinction between cash and accrual. You might want to create a Bill > Bill payment for correct reporting. 

I'd recommend getting in touch with your accountant for additional assistance in choosing the right accounts and transaction to use.

You can always get back to me if you need anything else. Take care and have a great day!

Hi lucyatHC, 

I understand what you are trying to do. Trying to bill customers for accrued subk invoices not yet received.  Not really a good practice but I understand why you are doing that to expedite cash flow in from customer. Looks like you went ahead and converted from QBO to QBDT as I saw was suggested to get more control.

The problem is that you are trying to do accrual basis accounting on a system whose default is cash-basis. As I mentioned in response to your original question here and you probably already, QB says you can run reports on cash or accrual-basis, but all it really can do is to remove AP and AR entries from your reports. 

If I may suggest, try fixing the problem at the source.  Give your subcontractors a deadline by which date they need to submit their invoices to be included in current period billing. Tell them if they miss deadline that they don't get paid until the following period. This works for every subcontractor I have worked with.

Just like you have x number of days to bill your customer, you can impose that same timeline onto them. Your other alternative is to consider a real accounting system that handles accrual-basis accounting that will then also automate your whole billing process so that you don't have to do all these workarounds.

The amount of time you spend on all these workarounds most likely cost more than the cost of a system that does all your project cost accounting including billing with Provisional indirect billing rates and ICE automatically from timesheets and eliminates manual expense reports and accrual-basis is then default. 

I assume you are working on CPFF or T&M Govt contracts from what you have described in these posts.  I do not sell any systems but I have implemented many and can tell you what works best for your needs. So I will send you a private message with some helpful info if you want to really make your work much easier. 

Hey Teri,

How can the deprecation be recorded so will now show up in Cash Basis financial statements. The expense is deductible for taxes, so I want to keep the record of it, however because I used JE it showing on trial balance, P&L and balance sheet for Cash Basis.

Thank you,

Oana

Also, what you say that no system does this, you can check out XERO and see that they can separate non-cash transactions from cash one. I just moved from XERO to QBO just to find out that depreciation will show up on my cash basis reports. 

If you accrue expenses through accounts payable do you need to manually reverse them?

I'm here to share insights about accruing expenses through accounts payable, @Louie2020. 

You'll want to accrue expenses through accounts payable, you can create a Bill and pay the amounts later using the Pay bills feature.

Also, I'd recommend getting in touch with your accountant for additional advice. They know what are the correct accounts to use and if you need to manually reverse accounts in a more complex transaction.

You're always welcome to comment here if you have other concerns with recording expense and income transactions. We're here 24/7 to help you in any way. Stay safe and more power!

I have the same problem, and I just wanted to check when QuickBooks will catch up with its competitors and distinguish non-cash transactions from cash transactions. Currently, you are forcing your users to keep depreciation and other calculations outside QuickBooks in Excel, like 20 years ago. Deprecation GLs will never be part of cash basis transactions, so don't understand why is that hard for you??!

Xero has the ability to filter out closing accrual JE's. Why can't QB do that too?