Question

Cash Basis Journal Entry

Forum|Forum|7 years ago
December 4, 2018
4 replies
63 views

When posting a manual Journal Entry (db. Expense & cr. Accrued Expenses), it always shows up in Cash & Accrual Reporting. However, I want to be able to record accrued expenses without running them through AP. Is there any way to post a Journal Entry for just Accrual Basis Books and not show up on the Cash Basis besides through AP?

QuickBooks Online

john-pero

Level 12

If you enter a Vendor Bill it will be a current expense under Accrual but will not show in Cash accounting until you pay it. Same with income, record an Invoice and under Accrual it is today's income even if customer never pays you.

What you have to realize is that journal entries bypass the distinction between cash and accrual

M

Malcolm Ziman

Level 4

@john-pero wrote:

What you have to realize is that journal entries bypass the distinction between cash and accrual

Just yesterday there was a discussion about this. It seems that in Desktop it depends on which entry is on the first line of the JE, which seems to be a way to control this, but in QBO it makes no difference which entry is on the first line

https://community.intuit.com/questions/1782280-my-clients-are-on-a-cash-basis-is-there-a-reason-that-all-of-a-sudden-my-journal-entries-are-not-showing-up-on-a-cash-basis-report-but-they-are-on-an-accrual-basis?jump_to=comment_3701207

P

paxcpa

The link may have been removed since this was posted three years ago, @Arif3.

This is the exact verbatim of the customer on this post when I try to extract the words from the link: "my clients are on a cash basis is there a reason that all of a sudden my journal entries are not showing up on a cash basis report but they are on an accrual basis?"

The answer would be similar with the accountants and professional QBO users advice above this thread.

For more details about the cash and accrual basis of accounting, you can refer to this article: Choose between cash and accrual accounting methods in reports.

Please feel free to leave a message below this thread if you have more questions. The Community is always here to help. Stay safe and well!

I want to ask for confirmation on this - Is there no way to have journal entries for accruals (separate from AP activity) excluded from cash basis reporting? Specifically, I do payroll accruals for each month end, but if I want to see cash basis month to date expenses, I don't want that accrual or its reversing entry included in the cash basis payroll expenses - it skews cash basis because the JE its including doesn't touch a cash account.

For example, a client may have had two payrolls in June so far, but because the reversing entry from May month end is showing in cash basis for June, it's offsetting the cash basis payroll skewing the expense to be way too low.

M

Malcolm Ziman

Level 4

@Ericcohen wrote:
Is there any way to post a Journal Entry for just Accrual Basis Books and not show up on the Cash Basis besides through AP?

I tried a zero Bill with expense on 1st line and other current liability account on the 2nd line as a negative to offset, which you would think would work but does not. The expense still shows up on a cash P&L. So it seems there is no choice but to go through AP

E

EriccohenAuthor

Yeah, I have not found a workaround which is pretty frustrating. There are times we need to record items outside AP and show in other liability accounts.

qbteachmt

Level 11

AP and "accrued expense" are the same thing; the purpose of AP is to Accrue Expense to be paid later.

M

Malcolm Ziman

Level 4

@qbteachmt wrote:
AP and "accrued expense" are the same thing;

Not always. Eg. You may want to accrue salaries & wages. That is not AP

C

ChristopherCPA

I’ve been using a workaround that seems to do what the client needs. I’ve created a location called “Accruals” and I add this to the line items of journal entries that I want only to show on an accrual report. When I want to run a true cash basis financial statement, I just click the “cash” radio button and then customize the report to remove transactions with the “Accruals” location, and it works!

So I maintain the books on cash and book those adjusting entries to convert to accrual. We also use bills/invoices, but that only goes so far. Far easier to use AJEs for most accruals.

Hope this helps!

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