Long Term Liability

With all due respect to staff, a P&L will not show payments of non-expense items from cash flow like liability reductions any more than borrowing the money in the first place would show as income. Liability payments or receipts never ever show in an expense report OR a P&L since they do not contribute to either. These item types will appear on the Balance Sheet, Statement of Cash Flow, Transaction Detail Bby Account

I have been making monthly payments on loans and our line of credit account (liabilities).  However, these monthly payments are not being reflected on my P&L as business expenses and so my net income is over-inflated.  I see the loans in my balance sheet, but need them to also be reflected in P&L Report.  Did I set up the loan and line of credit accounts incorrectly???  I reviewed the question previously submitted and not clear on the final resolution.  Please help.  Thanks.

I am having the exact same problem. Makes zero sense why long term liabilities (ie mortgage loan notes are not classified as an expense on profit and loss.). We are having to pay money. Therefore it’s an expense. Hopefully someone has an answer. 

Thanks. Your statement makes sense. But still looking for a monthly report that is profit and loss with my mortgage payment added in. 

Hello SAR801,

Though loan payments are cash outs from your bank register, they still won't show on your Profit and Loss reports. Just like what john-pero said, it doesn't affect the expense accounts.

Instead, we can pull up the Transaction Detail by Account report and customize it:

1. Open the Transaction Detail by Account report.
2. Click the Customize button and go to the Filter section.
3. Filter the Distribution Account and Account fields. This includes the affected account of the mortgage payment.
4. Click Run report.

That is the closest workaround that I can think of to show your mortgage payments and other expenses in one report.

We'll get back to you if you have other concerns.

The principal reduction of any loan liability is never an expense and since it is not an expense is never calculated in profit or loss. The use of those funds may format not be an expense but those are separate transactions.

Think of the reverse. Would you wish to claim as taxable income the money you borrow? No you would not.

Another illustration of this concept is credit cards. Your expense happens when you charge and your card balance increases as you have borrowed short term from the card company. When you pay the monthly bill it is not an expense - only loan reduction. A mortgage or operating loan works the same way. You deposit working capital as a liability and then expense it. If you purchase a depreciable asset it is not a current expense but is expensed over time through depreciation or amortization which is a year end separate paper transaction purely for taxes. You can split up the known depreciation on a monthly basis but due to co lingual changes in fax law and what you might be able to deduct each year I would hold off on booking depreciation until tax time and let the tax CPA handle it.

I understand your question completely.  There is no canned report (or contributed report, that I have found, anyway) that will include both P&L and Balance Sheet accounts.  The way I solved this issue, because we have a loan and multiple shareholders that receive distributions, both of which show up on the Balance Sheet, was to create a custom report, export to Excel, and modify.

Go to: Reports, Custom Reports, Summary, under the Modify Report window that pops up, in the "Display columns by" choose month, year, quarter, etc., for the time period you want, then in  "Display rows by" choose Account List, click on the Filters tab at the top, in the CURRENT FILTER CHOICES box on the right, choose the "Account Filter" and scroll clear to the top of the list and choose All Accounts.  Then click OK and you can actually choose the Dates, From and To, here. You can also change the Show Columns option here to view numbers by month, etc.  **Please note that many of the Balance Sheet Accounts will be Cumulative, based on inception date of your company, for items such as Assets, Member's Equity, etc.  But, since you won't need many of these for your purposes, you can either hide or delete the rows in Excel.  Truly, the only way to get at the TOTAL monthly expenses, which includes your loans on the Balance Sheet, will be to either run both reports and modify in Excel or run a custom report and modify in Excel.  Good luck - many of us out here understand and appreciate your need and the pain that comes along with it!

I agree, it is terrible how there is no report I can run that will allow me to add my monthly long term liabilities to my profit and loss report.  I have several rental properties and need to insure each property is making money and the monthly loan payment is an expense.  I need a means to include this in my profit loss report as an expense so I can see true cash flow. 

Mattman8, this doesn't help with operating your quickbooks, but I ran into the same problem a couple years ago as I started to expand my rental portfolio.  There are many other programs out there that allow you to input data strictly as "income" and "expenses" to give you the number you're looking for, essentially giving you the information on the overall health of your real estate business.  I use Stessa.com.  It's free to start using.  There are more in depth versions of the program that you may need depending on how much information you're looking for.  But for general numbers on each building you own, the free version works just fine.  Essentially rendering Quickbooks, just a book keeping program to be able to easily file taxes.  

Good luck on all your endeavors! 

One of the ways I am considering accounting this is that I set up an Income and Expense account for spending against a Long Term Liability. When a payment is made against a LTL account, a matching journal entry transfers that into an Income account for this purpose. Then the P&L will reflect this as an operating income/expense. I am wondering of others have considered this approach and what the pros/cons are.

In my quickbooks the long term liabilities do not show up on my profit and loss statements, hence none of those payments show up either.  Is there something that needed to be entered to get them to show up?

Thanks for joining this thread, @Debra_.

The long-term liabilities will not show up in your Profit and Loss statement since this report will show your total income, your gross profit, expenses, and your net income or loss. To see the long-term liabilities you can pull up the Balance Sheet report instead to see all the money your company owes, etc. 

Please note that you can pull up any Balance Sheet report to view your long-term liabilities.

Here's how to pull up the Balance sheet report in QuickBooks Online:

1. Sign in to your QBO account.
2. Click Reports from the left menu.
3. Enter Balance Sheet in the Search field.
4. Select Report period.
5. Click the Customize button and filter the necessary details.
6. Click Run report.

However, if you're using QuickBooks Desktop, you can follow the steps below on how to pull up the report.

1. Go to the Reports menu and select Company & Financials and then choose the  Balance Sheet report you want to pull up.
2. Select Customize Report.
3. On the Display tab, from the Dates ▼ dropdown, select All.
4. Select Refresh.

For more details about the Balance Sheet report, you can check out this article: What is a Balance Sheet report?

Let me also add these articles that you can utilize to seamlessly manage your reports and accounts in the future:

• Understand reports
• Run reports in QuickBooks Online

Let me know in the comments below if you have other reporting concerns or any QuickBooks related. I'm just around to help. Take care always.

wrong

IMHO (not an accountant) this is EXACTLY how it should be done! I'm not sure how all of these other posts are correctly reporting deferred income and expenses to the IRS. But your solution keeps things tidy.

We found the answer to be a report called Statement of Cash Flows.   

The report displays Operating Activities and Financing Activities.  

Operating Activities calculates Net Income from Net Cash by deducting costs associated with operations.  For us this shows subtraction of Inventory - Production Materials, Inventory Asset, Accounts Payable, State Sales Taxation, Long-Term loan payments.

Financing Activities seems to show the net cash provided by financing activities.

Cash at End of Period this is the cash at the end of the period.  

We set the report period for the month for which we need data.  This provides us the Net Income from Profit and Loss, which is reconciled against reduction in Cash Out from monthly operations. 

Ultimately, we get the Cash at End of Period for the given month in question. 

Hope this helps someone.  

I have the same problem and my only solution is to extract pieces of information from multiple reports. That's ridiculous for software as powerful as QuickBooks. We have two car payments and the vehicles are set up as fixed assets with the loan as long term liabilities. From what I can tell, this is the correct way to set up financed vehicles in QuickBooks. I'm even splitting the principal and interest when recording payments. But when I need to see what's going out monthly/quarterly/annually, there's no report in QuickBooks that gives me the true numbers (that I can find anyways). If my monthly expenses are $1,000 and my monthly car payments are $1,000 ($500 principal and $500 interest), QuickBooks P&L report tells me I have $1,500 in expenses. I understand why P&L is reported this way, but it's a PITA when I'm trying to find what's really going out each period.