Trial Balance - Accounts Payable and Accounts Receivable

If you are a cash basis taxpayer then you sent the wrong reports (Accrual Basis) to your accountant. You should have sent a cash basis Trial Balance and General Ledger . Click on modify report and check "cash basis".

It's maybe never easy to provide sufficient detail in a post with writing an essay, but to clarify, the acountant was indeed sent the correct cash basis TB.

The problem is because he's now requested a breakdown of bills and invoices outstanding at the year end and more specifically (as per the original post) that the detailed QB breakdowns for these two categories do not agree with the cash basis TB figures. However, if the TB basis is changed to accrual then the figures do agree. It's like the cash basis TB totals are using the accrual basis bills/invoices outstanding.

(Actually some web sources seem to suggest that there shouldn't even be figures for bills/invoices outstanding at year end on a cash basis system. I can sort of see the logic in that but I'm (very) obviously no accountant and QB clearly does think the figures should exist.)

I'm battling the same problem with a current question (See "Balance sheet Cash basis A/R" posted 4/6). If you do a Google search in Google Groups, you will find quite a few messages about the problem, with no real answers.

The QB support site has a knowledge base article which tries to address the issue: Determining which transactions make up the A/R and A/P balances on a cash-basis balance sheet report KB ID#: 122646 Categories: Accounts Payable, Accounts Receivable

It identifies criteria which cause a transaction to be listed in the A/R register. However, in my current balance sheet I have transactions listed that cannot meet any of those criteria, so it makes no sense. (For example a transaction entered in January '04 paid within a couple of days in cash, and for which the sales tax liability was paid by the end of first quarter.)

The really irritating thing is that the Balance column simply appears to be the sum total of the gross profit on each item listed.

I wish we knew of someone at QB who would accept a file from one or more of us and analyze it, and get back to us. I'm not convinced the program is working correctly.

Neil

I found this posted on the QB Users forum that might help:

"QB does not always create a true cash report. It depends on what type of business you have and what items you have in your AR and AP transactions. You may have to make the final adjustments manually. The only AR and AP transactions to come off on a cash basis report are those connected to income and expense accounts. If a balance sheet account is used on any of those transactions, then they stay on and have to be manually adjusted on your reports. If AR has a negative balance then it is usally because of unapplied payments. Pull up an Open Invoices report and look for any negatives. If the customer is not using the correct procedures to record payments, then this will always hang up the cash basis report. If you find both whole and negative numbers on this report you need to use the Receive Payments function to apply the payment correctly to the invoice. If AP has a negative balance then it's usually due to to an overpayment to a vendor using the Pay Bills screen or a check that was charged to AP. You have to run an Unpaid bills report and again look for positive and negative numbers and use the Pay Bills feature to apply the credits to the unpaid bills. Any other adjustments have to be done manually."

So look in the Balance Sheet detail on a cash basis and see which entries do not net to zero. Maybe that will isolate the entries you are looking for.