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devon-dcmotorspa
January 13, 2024
Question

P&L Report: CASH on desktop and ACCRUAL on online, they match. CASH for both: Desktop recognizes COGS when a sale is made. Online recognizes COGS when it is purchased.

  • January 13, 2024
  • 1 reply
  • 0 views
I just migrated from desktop to online and there is a difference on my P&L between my net income on desktop and online if I choose CASH as my report basis. 
If I choose CASH on desktop, and ACCRUAL on online, then they match perfectly. But if I choose CASH for both, there is a difference.

COGS is the driver of the difference when they are both reported as cash. 
• Desktop recognizes it when a sale is made to the customer.
• Online recognizes it when it is purchased from the vendor. 

This causes a difference of my Net income by $66k (showing as making more money on QBO).

I believe there is a bug in desktop. No matter if it's CASH or ACCRUAL, the net income is the exact same. When I do the same in online, the net income changes drastically. This could be an issue for my taxes because we report as CASH basis. I obviously don't want to change to ACCRUAL now because you have to get that approved by the IRS. 

Can someone explain if this is a bug or expected behavior?

1 reply

D
devon-dcmotorspaAuthor
January 13, 2024

I made a mistake in the original post. If I choose ACCRUAL for both, then they match perfectly.

CASH for both, they are off by $66k.

K
KimberlyS
January 13, 2024

Hello there, @Devon11_2.

 

I'm pleased to discuss the difference in your Profit and Loss report after migrating from QuickBooks Desktop (QBDT) to QuickBooks Online (QBO).

 

After migration, you can compare your Profit and Loss report to ensure complete data are copied. With this, you should note the following:

 

  • Set the Report period to All Dates.
  • Select Accrual as your accounting method.

 

Reports set on an accrual basis will match on both QBDT and QBO. However, you'll expect a difference for the cash basis report due to platform differences and migration limitations.

 

In addition, the cost of goods sold (COGS) should only be realized when a sale is made, not on purchases. You can review your Transaction Journal Report for your sales and expense transactions to verify.

 

Moreover, you'll have an equal amount for cash and accrual basis in QBDT if a constant level of sales and purchases is observed in your business. The timing differences between cash and accrual methods will eventually cancel out over time, with inventory levels remaining stable. Regardless of the accounting method, the recognized income and expenses will match.

 

Furthermore, to ensure everything is in a good state, you can review each transaction to see if there's a discrepancy. Once confirmed, rebuild the data file and restart the export process.

 

On the other hand, you might want to check these resources to learn more about how your books were moved from QBDT to QBO and to help you manage your company on your new software:

 

 

Feel free to leave a reply on this thread if you have additional questions when migrating your data, running reports, or other related concerns in QuickBooks Online. We can always lend a hand.

D
devon-dcmotorspaAuthor
January 15, 2024

I see in the article you linked:

Accrual basis reports in QuickBooks Online will match your reports in QuickBooks Desktop. Cash basis reports may not match.

 

Could you please explain why the cash basis reports are different? Was desktop doing it wrong all along and now it's fixed?

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