How to remove Journal Entries from Cash based reports

@GMNN 

This is a limitation of QB.  J/Es bypass the cash vs. accrual functionality in QBD.  You would need to create an invoice to book accrued revenue if you want the cash vs. accrual report functionality to work.  An invoice creates a J/E that credits the A/R account of your choosing and the items on the invoice are the debit entries.  Will it work for your business to set up an A/R account called 'Deferred Revenue' and use that as the A/R account on the invoice?  Obviously, deferred revenue is not A/R but it will allow you to book the entry to that account and it will be filtered out when you run cash vs. accrual reports. 

Journal entries, like most other transactions in QuickBooks are included on cash basis reports based on their transaction date, except in rare case where they use AR or AP accounts in the same way that regular AR or AP transactions do.

Cash basis reports in QB aren't cash flow reports, but are instead modified cash basis, meaning the cash basis setting only impact AR and AP transactions, effectively delaying the recognition of income and expenses until they are paid (paid out or money coming in). But other transactions, like checks in your checking account and credit card charges, continue to be recognized on their transaction dates, even though no actual cash trades hands on those dates (in most cases), but instead on a later date, when the checks clear or the CC account balance is paid.

This is standard from a GAAP perspective and also for taxes. For example, if you write a bunch of checks and record them in QuickBooks, those expenses are recognized as of the check dates. It doesn't matter if the recipients sit on the checks for three months and don't cash them. They're still expenses to you.  Similarly, Journal entries are considered cash basis events. For example, if you record a journal in a loan account for the interest accrued on the account, that's a cash basis event/expense even though no cash actually changed hands.

In your case, I'm not sure why you're doing that you're doing. Generally, income is recognized when you earn it. And, when you issue an invoice, its date is generally the date that's used to recognize the income for a sale. Cash basis allows you to delay that income to a later date when you get paid. But I don't know of a common reason to record income before you bill it out - which is sort of the opposite of cash basis. It's pulling the income even farther forward than it would typically be recognized for even accrual accounting.

You can filter your cash basis reports by transaction type, and include everything except Journals. But, that will remove all Journals, and in the case that you've recorded other things using Journals, like the aforementioned interest expense, those will be excluded as well.

@BigRedConsulting 

In your case, I'm not sure why you're doing that you're doing. Generally, income is recognized when you earn it. And, when you issue an invoice, its date is generally the date that's used to recognize the income for a sale.

It's common to accrue revenue in industries that have long-term projects.  The revenue must be recorded as earned (according to GAAP) since they have met their performance obligations.  However, they are unable to bill for it because of the provisions in the contract.  Therefore, accrued revenue is where it goes until the customer is billed.

RE: It's common to accrue revenue in industries that have long-term projects. The revenue must be recorded as earned (according to GAAP) since they have met their performance obligations. 

Makes sense, but also doesn't seem that a company with this sort of requirement would be reporting financials on a cash basis. The two don't seem to go together.

@BigRedConsulting 

Makes sense, but also doesn't seem that a company with this sort of requirement would be reporting financials on a cash basis. The two don't seem to go together.

Presumably, they aren't reporting their financials on a cash basis.  More likely, they need to run a cash basis P&L as the first step in preparing a cash flow statement or some other internal requirement.

I have a similar issue, the client wants accrual reporting but files on a cash basis.  I don't see how to filter all "journals" from the balance sheet or P&L, please advise.

Hello there, @clm5.

I'm here to help run and customize the Profit and Loss Detail and Balance Sheet Detail reports to show all the journals on an accrual basis. You can follow the detailed steps below:

1. Open your QuickBooks Desktop (QBDT) company file.
2. Go to the Reports menu, then select Company & Financial and choose Profit and Loss Detail.
3. Click Customize Report, then go to the Filters tab.
4. In the Search Filters field, search for Transaction Type and choose Journal from the drop-down.
5. Click OK.
6. Go back to the Reports menu, then Company & Financial and choose Balance Sheet Detail.
7. Click Customize Report, then go to the Filters tab.
8. In the Search Filters field, search for Transaction Type and choose Journal from the drop-down.
9. Click OK.

You can check out this article to learn more about customizing reports in QBDT: Customize reports in QuickBooks Desktop.

Just in case you want to memorize these reports so you don't have to go through the customization process again, feel free to check out this article for more guidance: Create, access and modify memorized reports.

Come back to this post if you have other concerns or follow-up questions about customizing reports. I'll be around to provide further assistance.

I know how to do this in desktop, I've been doing this for years.  I migrated data to QBOL and can no longer filter by transaction type to remove AJEs from cash basis financials.  Please advise or request product enhancement so that I can do this.  I've also explored the new SS Sync tool, and  this filter is likewise unavailable.  There are reasons why clients want accrual financials for management but need cash basis for tax filing.

Hello there,

Currently, this option in QuickBooks Desktop is unavailable. As we value your suggestions, I recommend sending your feedback to our Product Development Team. Here is how:

1. In your QuickBooks account, click the Help option.
2. Select the Send Feedback Online option.
3. Choose Product Suggestion.
4. Enter your feedback.
5. Click the Send Feedback button.

Also, feel free to visit our Feedback forum page to see a list of other QuickBooks users who have already suggested this feature and for the recent updates in QuickBooks.

You can utilize this article for future reference: Customize reports in QuickBooks Desktop.

For additional QuickBooks-related concerns, don't hesitate to post them here in the Community. We're always available and willing to lend a hand to your queries. Have a great day ahead.

@clm5 

"I migrated data to QBOL and can no longer filter by transaction type to remove AJEs from cash basis financials."

Please tell us how to filter out JEs in Desktop.  You can run reports that only include JEs, but I've never seen how to run reports that exclude only JEs.  

Me too. This is really frustrating.