Question

Accounting Period

Forum|Forum|3 years ago
February 16, 2023
17 replies
52 views

Why is quickbooks using the date of an invoice or check for the accounting period?????? Why isn't it like other ERP's where the transaction date drives the accounting period. Because of this lack of functionality, the vendor ledgers are sloppy at best

QuickBooks Enterprise Suite

S

SirielJeaB

Moderator

We are grateful that you are back in the Community forum, Sandy. We appreciate you using the Community to voice your concerns. Please allow me to provide you with some information on this.

I understand how convenient it is for you to choose the basis of accounting period you want to display in your QuickBooks Desktop.

The accounting period in QuickBooks is determined by the accounting method employed. When using the accrual basis, the accounting period is when you enter a transaction, pay, or receive cash. On the other hand, if you operate on a cash basis, the accounting period begins when you receive a payment or pay a bill. Moreover, how the accounting period is displayed is one of the features of the QuickBooks Desktop.

You might want to read the following article for more information on personalizing and adding specific information to your invoice and other form styles in QBO: Customize sales forms.

Visit this article to learn the difference between Cash and Accrual basis and how to set them as preferences in QuickBooks Desktop for Windows: Differentiate Cash and Accrual basis.

Keep us posted if you need further clarifications regarding the accounting period in QuickBooks Desktop. We're available 24/7. Have a nice day!

M

mmurrell1

Your reply does not address the OP's concerns and seems patronizing at the least. As accountants, we KNOW the difference between accrual and cash-based accounting. Fancying up a sales invoice has nothing to do with recording expenses on a cash or accrual basis!

Let's use a utility bill and accrual-basis accounting as an example....but this would hold true for a whole number of expenses. The utility bill is dated 03/05/2023 but is for services from 02/01/2023 to 02/28/2023. The bill would be entered into QBO with the actual billing date (03/05/2023) and would therefore show up as an expense on the March P&L. This is totally wrong. This expense should show up in the February P&L. If we had a "posting date". the bill could be entered correctly (03/05/2023) with a posting date of 02/28/2023 and the P&L would reflect the correct amounts.

I use QBO and don't understand why Quickbooks does not address this glaring issue.

A

AliB2

Hello there, @AliB2.

Let me share some insights about how QuickBooks Desktop (QBDT) tracks payroll expenses using the accrual accounting method so you can manage your transactions accordingly.

QuickBooks tracks your payroll expenses based on your paycheck date (02/06/23), not on your pay period (01/01-01/31/23). This is why the system booked your expenses and liabilities in February. With this, all your payroll reports, forms, and tax liabilities are based on the pay date.

If you wish to learn more about the accrual accounting method in QBDT, please see this article: Cash and Accrual basis.

Also, you may want to visit this page as your reference to learn more about how the IRS defines constructive receipt in recording payroll expenses: IRS Publication 334, Tax Guide for Small Business.

Please feel free to leave a comment below if you have other concerns about managing payroll transactions and accounting methods in QBDT. I'm always ready to help. Take care, and I wish you continued success, @AliB2.

My point exactly. This is called a cash basis not accrual basis.

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