Accounting & Bookkeeping & Small Business Forum

[rjbrielle]

I have a client who is on accurral basis but reports tax on cash basis. When we print out the sales report on cash basis it includes unpaid invoices. They've been exporting to excel and deleting the unpaid invoices to include only ones that have been totally paid.

What's the best way to handle this? ...I have a feeling that maybe the reports are right, but we don't understand why it does what it does.

[benjonusa]

Hey - when you print reports in QB you can just hit modify report, then select the filters tab at the top and from there, under "choose filter" you can select "paid status" - click on the "closed" option to view all sales invoices that have been paid/credited. You can modify any report however you like. No manual deleting or modifications are necessary (in most cases).

Ben Jones
www.prodigyaccounting.com

[rjbrielle]

Thank you benjonusa!

[Monica]

Hello rj,

If the company is using an accrual method, the unpaid invoices would be reported along with the paid ones. As indicated previously, you can format your reports both ways, but the correct numbers to be reported would include all invoices.

Although, I am not sure why the taxes are paid on a cash basis if the company is on accrual...? Is it because invoices are generated that you say they are on an accrual basis?

Monica

[rjbrielle]

Well, that is what I thought...they were filing on accural but then changed to cash now they file on cash basis even though their books are on accural basis.

[Monica]

Hi rj

If your client filed the form with the IRS to change their accounting basis, and the IRS granted that request, then you should go into the preferences and change it to the cash basis.

I hope that this helps.

Monica