AR Balance on Cash Basis Balance Sheet

Hello there, matt-SVPC.

An accrual-basis report shows income whether your customers have paid your invoices and expenses regardless you have paid all the bills. The cash basis report on the other hand only shows income if you have received cash and expenses if you have paid cash. 

Let's ensure that the date range of the reports is the same. I'd also suggest reaching out to an accountant when reversing accounts so we don't mess up your books. 

You'll want to read through these articles for more details: 

• Choose between cash and accrual accounting methods in reports
• Create a journal entry in QuickBooks Desktop for Windows or Mac

Let me know if you have other questions. Take care!

Hi Catherine_B, thanks for the reply but this is not helpful.  The basic question is how to get the cash basis balance sheet to show the correct Accounts Receivable number which is ZERO.

Thanks for getting back to us, @matt-SVPC.

I've got some additional information to share, so you can get the cash basis balance sheet to show the correct Accounts Receivable number that is zero.

You'll have to make sure that the payment and the invoice date are the same. This way, the report will show zero in the cash basis accounting method.

If it's the same and the balance still shows, we can go ahead and run the verify your data. This can help fix data-related issues on a company file. Let me show you how.

1. Click on File at the top menu bar.
2. Select on Utilities.
3. Click on Rebuild Data.
4. Select OK when you see Rebuild has completed.

After that, you can proceed with verifying the data:

1. Click on File.
2. Select on Utilities.
3. Click on Verify Data.
4. If you see QuickBooks detected no problem with your data, select OK. You may continue using your company file.

For detailed information about this, please see this link: Resolve data damage on your company file.

However, if the issue persists, then I suggest reaching out to our Customer Support. Their tools can get into your account in a secure environment and provide other troubleshooting steps to get this resolve. You can follow the steps below on how to reach them:

1. From your QuickBooks Desktop account, click the Help menu at the top.  
2. Click the QuickBooks Desktop Help menu and select QuickBooks Desktop Help.
3. Provide some information about this concern on the search box.
4. Click the Contact Us link at the bottom of the window. 
5. You'll now be provided with a few support options.  

Here's the contact QuickBooks Desktop support article for more information.

 Also, I'm adding this article: Resolve AR and AP balances on the cash basis Balance Sheet. This will provide you in-depth details on how to resolve account issues as well as tips to prevent them.

I'm still here to help if there's anything else that you need. Just leave a reply below and I'll get back to you. Keep safe and take care!

Hi Joesem, thanks for the reply.  Just in case I rebuild and verified my file but still the same.  Also to  your comment that with cash basic accounting you would always have the same invoice and payment date is not realistic for any business (cash or accrual).  Also is looking the the drill down for the Cash Basis AR balance I see a bunch if entries related to inventory cost and undeposited funds (BS accounts).  I have run this transaction reports (as instructed by another support request) to filter on Paid and the value is zero.  With this said this seems to be a bugs with Quickbooks?

Hello there, @matt-SVPC. I'm here to share further details of how QuickBooks Desktop (QBDT) generates reports. This way, you're able to get the appropriate information you need.

When you pull up reports, QuickBooks displays information that's extracted from the data file and shown as a set of transaction lines. For the cash basis accounting method, your report counts income as though it  happened when you got the payment. While accrual method counts income as if it happened when you sent the transaction.

On the other hand, the Cash Basis Balance Sheet (CBBS) shouldn't show Accounts Receivable (A/R) or Accounts Payable (A/P) balances. This is because these accounts track open (unpaid) invoices and unpaid bills. You can learn more about this through this article: Resolve AR and AP balances on the cash basis Balance Sheet. It also includes recommended solutions and ways to prevent possible issues in the future.

Also, here's an article that'll further guide you in fixing a balance sheet report in QBDT: Balance Sheet in QuickBooks Desktop. It also contains instructions on what to do before you make changes to correct the information on your report.

Let me know in the comments below if you have other reporting concerns or inquiries about managing your AR transactions in QBDT. I'm just around to help. Take care always.

Hi Rea, thanks for your reply but this still does not help because I need to use the FULL functionality of Quickbooks including inventory as a cash basis tax reporter.  You solution attached talks about not using full functionality including inventory.  I need another solution or bug fix?

Hi therematt-SVPC.

Thanks for coming back to this thread. I understand that you really need to use inventory items.

As mentioned above the Cash Basis Balance Sheet won't show A/R balances because this account is used to keep track of transactions that have not been paid. Take note that there are a number of reasons this issue will come up. Depending on your situation, you can follow the steps from the article provided by my colleague, Rea_M to find the root cause transactions and fix the A/R balance.

However, if the issue persists, you'll want to give us a chat or call so we pull up your account in a secure environment and review your reports. Here's how to connect with us:
 

1. Open your QuickBooks Desktop.
2. Go to the Help menu, then choose QuickBooks Desktop Help.
3. Select Contact Us.
4. Enter "A/R balance in Cash Basis Balance Sheet" in the description box, then click Let's talk.
5. then choose a way to reach out to us.

Additionally, I've included an article that will help you help you resolve common accounts receivable report issues: AR balance on the Chart of Accounts does not match AR balance on reports.

Do let me know if you have further questions about reports by tagging my name in the comment section. The Community always has your back.

Cash basis reports will pick up any "paid" bills, even in A/R & A/P, but the net value of the transaction should equal 0 - it is recording when paid so the software sees the transaction as going into those accounts and immediately back out as the cash is spent. Typically you will see inventory items flowing through A/P, but the transaction total should be 0. If you drill into A/P from the Balance Sheet you should see a series of transaction lines for a single bill and if you drill into any of those lines you should see that the bill has a balance of 0 and is marked as paid on the same date of the bill. You should also see that after the sum of all the transaction lines on the transaction detail report (A/P drill down from the Balance Sheet) the ending balance of that account is the same as the beginning balance (immediately before the bill transaction line details). If you see a 0 balance on the bill when you drill all the way into it, but the sum of the transaction lines on the A/P transaction detail report does not equal 0, look to see if the first line entry on the bill is an Inventory Asset account and key that line into the bottom of the bill and delete the first line. You won't change the total of the bill, just the order the transactions are listed in. For some reason cash basis reports will produce strange values if an inventory asset, A/R, or A/P account is listed first - this can happen on all transaction types in QB. 

If you find the inventory bills are netting to 0 on the transaction detail report, your problem may either be: 

1. The date the bill was paid is before the date of the bill - this will cause the bill to remain in an "unpaid" status and create an abnormal balance in A/P, as it looks like you've prepaid a bill under cash basis because it omits the paid bill. To help find these transactions you can look at the A/P aging report and any vendor listed on the report that has a 0 balance will have a bill and a payment that need matched - click into the bill and from the Main tab click assign credits and assign the credit to the bill. 

2. You have journal entries to A/P - QB doesn't actually keep a dual set of books, it just omits unpaid bills and invoices, so all journal entries will read back to both accrual and cash basis reports. If you have journal entries to A/P in QB and they don't net to 0 within the period (whether you are looking at day, month, quarter, etc.), you will see a balance in A/P in cash basis. To see if this is the problem you can customize the transaction detail report to only include journal entries. 

A Proadvisor license can help to clean up some problems seen in cash basis reporting, particularly unmatched transactions; however, if you are doing journal entries for accruals, prepaids, deferrals, etc., you will see balances in cash basis reporting that are unlikely to fix. There are some forums that discuss workarounds, but to be honest, they aren't that great. You can create GL accounts outside of A/R & A/P for journal entries, but you would still need to perform a conversion for true cash basis reporting. 

great observation about the order of transactions on GJ entries.  With receivables on 2nd line, this entry will show on cash BS.  Actually worked well for ERC accounting, needing to add in IRS income not yet received over two years later.