edit where income reports in P&L

Let me share some insights into the potential reasons why invoices showing as expenses instead of an income in the Profit and Loss report and help troubleshoot the issue, bill-naturestrea.

In QuickBooks Online (QBO), the main difference between cash and accrual accounting methods in the P&L report lies in when income and expenses are recorded. Under cash accounting, income is recorded upon receipt, and expenses are recorded when paid. With accrual accounting, income is recorded when invoiced, and expenses are recorded when billed, regardless of when the money is received or paid. To address the issue, we can consider the following:

• When receiving payment from a customer, it impacts Accounts Receivable and your bank account, while paying a bill affects Accounts Payable and your bank account. These are balance sheet accounts and don't directly impact your Profit and Loss report.
• To recognize revenue for received payments, you need an invoice created for that customer. This goes for your vendors, too. To recognize the expense from bill payments, there must be a bill.
• If you don't use the invoice/receive payments system and instead record deposits, they should appear as long as the deposit affects an income account. Similarly, checks written or cash disbursements made will show as long as an expense account is listed on the transaction.

Also, these are the things you need to know when you run a report:

• With invoices and received payments, the revenue information is contained in the invoice.
• With bills and bill payments, the expense is tracked by the bill.
• The cash basis reports will use the invoice/bill date.

We can consider the accounting basis used in generating the report. The difference between cash basis and accrual basis reporting is how the date is determined for reporting the income or expense. Here's how: 

1. Go to the Reports menu.
2. Choose the Profit and Loss report.
3. On the Customize report window, set Accounting Method to how you want the income/expense reported.
4. Press Run report.

If the same thing happens, you can customize the report to show all the income accounts. Let me show you how:

1. Go to Reports.
2. Click Profit and Loss.
3. In the top right-hand corner, press Customize.
4. Pick the Filter section.
5. Make sure a checkmark is beside of Distribution Account, and choose All in the drop-down box to show all accounts including income accounts. 
6. Press Run Report.

Also, you'd want to review the income account associated with the product item or service item used in the transaction. 

If the account is correct, just change the account to something else without ticking the box outlined in Step 4, save it, then change it to the correct account tick that box, and save. This updates the correct account and it will change all historical transactions to an income account. You can check out this article for more details: Change the account for a product/service item.

Furthermore, QuickBooks allows you to customize reports to display specific accounts and customers or format the layout to ensure the right data appears in the right place.

If you have more questions about reviewing the Profit and Loss report, feel free to ask here, and I'll be here to help you out. you have a good one.