Question

Cash Basis Journal Entry

Forum|Forum|7 years ago
December 4, 2018
20 replies
79 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

K

kpappas

Thanks for joining in this conversation, @paxcpa.

To give you an insight, the journal entry is a transaction that hits directly to your account. Hence, it will always show on the reports regardless of the accounting method used (cash or accrual basis).

I know how relevant to have the journal entries for accruals excluded in the cash basis reporting. At this time, we don't have an option to filter it.

For additional guidance in choosing the right accounts to use for your business, I'd recommend contacting your accountant. They're the best person to help correct your books as well.

For future reference, read through this article: Customize reports in QuickBooks Online. It helps you learn about how to personalize your reports and add the info that matters most to your business.

Adding here how frustrating it is that QBO treats JEs as cash. It falisfies cash basis reporting then. How incredibly unhelpful!!

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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