Matched deposits not reporting on P&L

Yes, there's a way to make your report accurate and match those payments to the deposit, @rbutz. The information below can guide you through the process while ensuring transactions are reflected in the Profit and Loss statement.

To ensure accurate reporting on your Profit & Loss (P&L) statement, reviewing the items listed on your invoice is essential. Verify that the income category assigned to each product or service is correctly linked to the appropriate income account. Here's how:

1. Click Sales in the navigation panel.

2. Under Products & services, select the item listed on your invoices.

3. Click Edit under the Action column.

4. Make sure to choose the correct category in the Income account tab.

This step is essential since the P&L statement is designed to track income and expenses, and any misalignment could result in inaccurate financial reporting.

In addition, when recording deposits, ensure they're linked directly to the appropriate income accounts. Then, verify that the accounting preferences in QuickBooks Online are set up to recognize these matched transactions as income.

Moreover, you can generate the profit and loss report to review all income and expense transactions.

Feel free to read these articles to consistently review your accounts in QuickBooks to verify that they align with your bank and credit card statements:

• Categorize online bank transactions.
• Match online bank transactions. 
• Learn the reconciliation workflow.

The Community is always available to provide further assistance whenever you require support managing your bank transactions. Just leave a comment below. Best regards!

@rbutz 

"Once I do this it doesn't report as income on the P & L. I am not even sure where this deposit ends up. Why would it not show as income when I am matching the payments to the deposits? We also don't want to change any of the categories as they use it to track COGS and Inventory. Is there a way to make it report correctly and still match those payments to the deposit?"

In this case, the deposits are unrelated to income because the income was either reported when they received payment on the invoice (if you're on cash basis) or when the invoice was created (if you're on accrual basis).  All you're doing is matching the deposit to income already recorded.    

I'm glad to step in and help you further with your QuickBooks Online inquiry, rbutz. Thank you for providing more details about your situation. I understand you've already verified the items in your products and services have the correct income accounts. Let's dive into why this is happening and how we can ensure your reports are accurate.

When you match deposits to received payments, you're not directly linking to income accounts. Instead, you're clearing out the Undeposited Funds account. I agree with  @Rainflurry's suggestion income recognition occurs earlier in the process, either when the invoice is created (for accrual basis accounting) or when the payment is received (for cash basis accounting).

Matching deposits to payments doesn't create new income. Rather, it tracks the movement of already recognized income. This is why it doesn't affect the Profit and Loss statement (P&L). As you correctly pointed out, you're matching income already recorded in the system.

For a comprehensive understanding of managing your accounts in QuickBooks and ensuring they align with your bank and credit card statements, refer to these articles:

• Categorize online bank transactions
• Reconcile an account in QuickBooks Online

Thank you for your continued trust in our services. Your commitment to maintaining accurate financial records is commendable, and I'm here to help you achieve that goal. If you have any more questions or concerns, please don't hesitate to reach out. We're here to lend a hand.