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T
t_al55
April 3, 2024
Question

Balance sheet

  • April 3, 2024
  • 1 reply
  • 0 views

My accountant tells me I can't count an invoice for a sale until product has been delivered to client. Is this true?

 

1 reply

J
JuliaMikkaelaQ
April 3, 2024

I appreciate you sharing this in the Community forum, @t_al55. Let me provide insights on how invoices are recorded as sales in QuickBooks Desktop (QBDT).

 

Your accountant's guidance aligns with the revenue recognition principles of accounting, especially in the Cash accounting method. In this method, an invoice is recognized as a sale or an income when the product or service is delivered and payment has been received from your clients, mirroring the practices in QBDT.

 

In QBDT, upon creating and sending an invoice to your client, it's recorded as an Accounts Receivable on the Balance Sheet and as Income in the Accrual method of the Profit and Loss (P&L) report. Subsequently, when you receive and record the payment in the system, the invoice will now reflect in the Cash method of the P&L report.

 

Moreover, it's also worth knowing that you can customize your financial reports to cater to your specific business needs and provide valuable insights into how your business is performing. 

 

Also, memorizing these reports can help you save the current customized settings, making it easier for you to access them in the future.

 

If you have any follow-up questions about managing your invoices and keeping track of your sales, please let me know by adding a comment below. I'm always here to help. Keep safe!

T
t_al55Author
April 3, 2024

Thank you for getting back to me. 

I understand, We have always used Quickbooks to create PO and Invoices as well as record payments and pay PO's but accounting was always done manually. I'm trying to use Quickbooks for everything now and I need to get Quickbooks to mirror the last manual entry. What do I need to do with the information already in QuickBooks so that I can pull a Balance Sheet Report, base on the Cash Accounting Method. So I can see if I can mirror my accountant year end numbers.

J
JuliaMikkaelaQ
April 3, 2024

Thanks for reaching back, @t_al55. 

 

I'm here to guide you on how to pull up a Balance Sheet report in a Cash accounting method so you can compare it with your accountant's year-end numbers. 

 

The invoices will be reflected on the Balance Sheet report on an accrual basis. Once the invoice is paid, it generates an income for your company. Since you want to generate a Balance sheet report, the invoices won't show on the cash accounting method. Instead, you can see the invoice payment from there. You may refer to the image below how the invoices and their payments will show on Accrual and Cash accounting methods on the Balance sheet reports:

 

 

To generate the report and switch to a cash basis, you can follow the steps below:

 

  1. Go to the Reports menu, then select Company & Financial.
  2. From there, select Balance Sheet Detail.
  3. In the Report Basis section, choose Cash to switch.
  4. Click Refresh to refresh the report.
     

 

Also, if you want to utilize this accounting method as a default for all your reports in the future, you can set this up in your company preferences. Here's how:

 

  1. Go to the Edit menu, then select Preferences.
  2. Select Reports & Graphs, then click the Company Preferences tab.
  3. In the Summary Report Basis section, select Cash.
  4. Once done, click OK to save the changes.
     

 

Furthermore, you can run and use QuickZoom Reports to bring up more detail about that number or item and open one of the listed transactions in its original form.


You can also set up and modify Scheduled reports to send reports on a regular and recurring scheduled time.

 

Rest assured I've got you covered if you have any other questions about managing reports in QuickBooks Desktop. Wishing you a fantastic day ahead!

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