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P&L Report Cash Accrual Does Not Match Customer Transactions for Received Payments

I am struggling to make sense of a large discrepancy between my P&L and my received payments. I am running my P&L as cash accrual because I have invoices dated from 2019 where final invoices were paid in 2020. 

 

My income in my 2019 P&L for cash accrual is all from sales transactions. I don't have any income that does not come from a paid invoice. The P&L shows over $20,000 more in income than my received payments from the same transactions. I cannot figure out what I am missing. The only thing I can think to do is to go through the detailed income report in the P&L and compare each customer's reported payment against my sales transactions. I have over 200 customers and very itemized invoices so this is going to be a really long process. Is there a common mistake that I am making?

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QuickBooks Team

P&L Report Cash Accrual Does Not Match Customer Transactions for Received Payments

Hello there, @rtadmin.

 

Thank you for providing detailed information about your Profit and Loss report.

 

There are two possible reasons why your Profit and Loss report shows a difference of $20,000 in your income versus your payment transactions.

  • You've received a payment directly through a bank deposit.
  •  The items in your invoices are not associated with the right income account.

You're right, the way to fix this is to manually compare the detailed income report in the P&L and check each customer's reported payment.

  1. Go to the Reports menu.
  2. Select Company & Financial, then choose Profit & Loss Standard.
  3. Double-click the income amount to open the Transaction Detail By Account report.
  4. Go to the Reports menu, select Sales, then choose the Sales by Customer Detail report.

From there, carefully locate the payment transactions that causes the mismatch of amounts in your P&L report.

 

If you wish o learn more about the  the difference between Cash and Accrual basis and how to set them as preferences in QuickBooks Desktop, you can check out this article: Differentiate Cash and Accrual basis. It also contains important reminder on how journal entries impact a Balance Sheet account.

 

Please let me know if you have other concerns. I'm just around to help.

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