Differences in Accounting methods
There are 3 different methods for reporting incomes and expenses in QuickBooks Online. Each report will be different depending on the method you choose. Having the function for different report can be very beneficial when preparing management account.
Below we will explain the three methods Quickbooks has to offer:
- Your report counts expenses when they have occurred even when they are still outstanding to be paid.
- Your report will count sales only when the payment is received.
- Essentially your report will count income/sales transactions on a cash basis and expenses/purchases on an accrual basis.
- Your report will count income when the invoice is sent, and payment is yet to be received
- Your report will include bills and expense even when payment is still due.
Cash only basis
- Sales and purchases transactions, both are reported as cash.
- Your report will only include income when the cash has been received.
- Your report will only include expenses when you have paid the supplier.
Changing the method on the report
To change the method used on an individual report:
- Go to Reports.
- Select a report.
- Under Accounting method select
- Accrual for accrual method
- Cash for cash method
- Check Report Expenses on cash basis only if you want to report to report expenses also only when money changes hand.
4. Select Run report.
You can also select the Customise button to open the Customise Report window and change the setting in the General section