Skip to main content
T
Tibo88
October 11, 2022
Question

Cash vs Accrual basis reports

  • October 11, 2022
  • 2 replies
  • 0 views

I have an isssue I hope someone can give guidance on. If we use A/R we are supposed to run reports on accrual basis, correct? But at year end when running the p&l to pull numbers for taxes, the accrual basis method of reporting overstates the revenue as not all have been paid. We file our taxes on cash basis, so would we not run the p&l on cash basis? Is it that the CPA would do a conversion to cash from the accrual reports?

2 replies

C
Carneil_C
October 11, 2022

I'd be glad to provide information concerning the reports run on a cash and accrual method, @Tibo88.

 

First, I'd agree that you can run an Accounts Receivable report on an accrual basis. However, running reports with these methods have its pros and cons. Thus, it's important to understand how it works so you can choose the best bookkeeping practices for your business.

 

That said, it would be best to seek professional advice from your accountant. This way, they'll be able to share with you the best method to use in running your reports.

 

You can utilize our Find an Accountant tool to look for one in your area if you're not affiliated.

 

Furthermore, you can also check this article for more details about the difference between the accounting methods, and how to change between the two: Choose between cash and accrual accounting methods in QuickBooks Online.

 

Please let me know if you need clarification about running reports in QBO, or if there's anything else I can do for you. I'll be standing by for your response. Have a great day, and stay safe! 

L
LBSusan
December 22, 2023

Hello,

 

We are having the same issue and our CPA has said the change in accrued revenue is taxable.  Has anyone figured out a workaround for this problem in Quickbooks Online?

 

 

G
GenmarieM
December 22, 2023

Hello there, @LBSusan.

 

I am here to share insights about running financial reports on accrual basis in QuickBooks Online (QBO.)

 

Running reports will depend on the accounting method because each method will run the income and expenses differently. You can refer to your accountant on what accounting method you will use to ensure that the report displayed is accurate.

 

Also, let me walk you through how to change the accounting method in QBO.

 

  1. Go to Settings, then select Account and settings.
  2. Go to the Advanced tab.
  3. In the Accounting section, click on the Edit icon.
  4. Choose the Accounting method.
  5. Select Save, then Done.

 

Moreover, I'm adding this helpful article as your reference in customizing reports in QuickBooks Online: Customize reports in QuickBooks Online.

 

Come back to this post if you have further concerns and follow-up questions about running reports and accounting methods in QBO. I'll be here to lend a helping hand. Have a good one!

    L
    LBSusan
    December 22, 2023

    Good morning.  Thank you for the information.  I know how to run the reports.  What I don't know is what QBO does in the background when running cash basis reports at tax time. In accrual accounting, which we use, AR and accrued revenue come into play but those items are not used in a cash environment.  

    Terms & ConditionsAccessibility statement