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Quickbooks profit on BS does not agree to profit i

Profit on BS does not agree to profit in P&L

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Callling Quickbooks users.  Client using Quickbooks online.  Profit in balance sheet does not agree to profit in P&l.  I have checked the period dates which are correct. Balance sheet balances!!

I have tried Quickbooks help twice but they don't understand accounts.  Latest adviser said the figures will be different because one page includes expenses but the other does not.  He emailled some steps to take but the headings do not appear on the screens I can see, so presumably intended for a different product and no help to me.

I have looked at Chart of Accounts which I find very confusing.  I know Sage (for example)  chart of accounts has a feature which tells you if any nominal account has been omitted .  Does Quickbooks have the same.?  Can anyone suggest some checks I can do?

Thanks for all answers.

 

Replies (23)

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By Matrix
10th Sep 2020 14:10

Check that both are on accruals basis rather than cash.

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By RobHam
10th Sep 2020 14:13

Thank you, Matrix. I should have said both are accruals based.

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By frankfx
10th Sep 2020 16:50

Profit.... Depends on what you are looking at.

Did you screen share with QB support

How many years data in QB
Perhaps export to excel the following

Do a tb for current year to date
Check the retained profit bfwd
Also run pl current year

Look at last financial year
Same exercise.
The profit figure you are expecting to see may be confused by corporation tax and dividends.

QB support. Not good. They are not bookkeepers!
Check out the QB community
Use some key phrases... may give you a heads up

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JEM
By jem
10th Sep 2020 17:25

I would run a detailed balance sheet report which will provide line by line detail of how the P&L figure on the balance sheet is made up. Sometimes there is a rogue posting.

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JEM
By jem
10th Sep 2020 17:25

I would run a detailed balance sheet report which will provide line by line detail of how the P&L figure on the balance sheet is made up. Sometimes there is a rogue posting.

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JEM
By jem
10th Sep 2020 17:25

I would run a detailed balance sheet report which will provide line by line detail of how the P&L figure on the balance sheet is made up. Sometimes there is a rogue posting.

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JEM
By jem
10th Sep 2020 17:25

I would run a detailed balance sheet report which will provide line by line detail of how the P&L figure on the balance sheet is made up. Sometimes there is a rogue posting.

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Replying to jem:
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By Cheshire
10th Sep 2020 18:38

jem wrote:

I would run a detailed balance sheet report which will provide line by line detail of how the P&L figure on the balance sheet is made up. Sometimes there is a rogue posting.

A bit of rogue posting going on here! ;-P

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By RobHam
10th Sep 2020 17:36

Thanks. I will do as suggested. This is the first year. Thus no dividends no corporation tax no brought forward figures. I cannot understand how it could be wrong. Am I naive??

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By SXGuy
10th Sep 2020 17:47

Not naive. Just need to follow the advice to track down the reason.

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By Cheshire
10th Sep 2020 18:42

You mention no brought forwards, but is that just because you are not expecting any, have you checked the software (dont want to assume!).

Try running a P&L on custom dates say 01/01/2018 to day before actual start and see if there is anything lurking.

Or a random one, not sure if it will work as I dont know my way round QBO. Run P&L for the financial year dates. Then run a Balance Sheet for end of financial yeat, click on the 'profit for the year', which will then take you to your P&L (but the report shows as custom dates) - are these figures on a line by line the same for each P&L? If not you can then drill down.

Failing that, push it up the line at QBO - insist the issue is escalated!

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By bronnley
10th Sep 2020 18:45

Are there any entries dated before the start of the financial year?
If the P & L is being run for a full 12 month period, there may be entries dated prior to the start of the 12 month period that would be included in the profit shown on the Balance Sheet but not on the P & L report.

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By Cardigan
11th Sep 2020 12:55

Can you run a report each month to try to track down when the error occurred? It will reduce the number of transactions you need to check to locate the difference.

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By frankfx
11th Sep 2020 13:14

OP
any success?

Have you allowed QB suppourt to see your screen.

Personnally, I do not believe this is a bug type error.

error with a transaction date falling out side pl year, and you not spotting the effect on bal sheet of the outside year dated transaction.
I am not going to replicate this myself, to test how and where QB picks this up.
You could, try with a £10,000 dummy transaction.

Many AWEBers would be interested to learn the out come .
Bug?
No bug?

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Replying to frankfx:
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By carnmores
11th Sep 2020 15:12

There is no bug its likely your mistake, as per matrix check that both reports are accriak. If it is an early period of trading and the first period of trading is less than 12 months then this will happen on many programs

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By jwgrogan
11th Sep 2020 18:10

I am really surprised that any accountant cannot see that the only foolproof way of going about this is the old-fashioned manual way - print out a TB, check it balances and then agree the balances to the P&L and BS and see which is missing something. The result of that exercise will point you in the right direction to correct it.

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Replying to jwgrogan:
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By carnmores
11th Sep 2020 19:30

Touche

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By carnmores
13th Sep 2020 09:43

Follow this advice and then click on retained earnings and change the transactions

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By Richard Grant
12th Sep 2020 08:02

You may find that it does what some setups of Xero do. It may have a "Director's Drawings Account" that nets off to retained earnings and doesn't show on the balance sheet. That way you end up with, for example, a profit of £1,000 and retained earnings of £0 as the dubious account nets off the withdrawls by the director instead of showing them as dividends.

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Replying to Richard Grant:
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By carnmores
12th Sep 2020 09:25

QBO certainly doesnt do anything like that. Its pretty clear what has happened all would become crystal clear if we were given the company start date and the periods concerned

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By RobHam
12th Sep 2020 09:46

I have a solution I can live with though I don't think it provides 100% of the explanation. Richard Grant you are closest!

When the client asked Quickbooks how he should deal with money he takes out of the business they said analyse it as retained earnings. When I took out these drawings there is still an amount in "retained earnings". Add this to the balance sheet figure of profit for the year and it agrees to P&L net profit (to the penny). So I will accept this.

I do not have the inclination to investigate what is left in "retained earnings" because the time spent on this job is already high.

Presumably next year the figure of retained earnings will be correct -the number will be the same as this year's net profit.

Interesting thread. Thanks to all.

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By carnmores
12th Sep 2020 11:03

Quote the time spent on this job is already too high
This is because you don't know how to use the program
You should investigate further so if it arises again you know how to deal with it

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By carnmores
13th Sep 2020 09:40

It appears that if payments have been posted to tetained earnings then they are being treated as quasi dividends. Using accountants tools reclassify these to directors loan account so that an appropriate adjustment can be made at year end for dividends salary etc as agreed by board

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