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Accrual vs cash basis

jimbean2

Tax Report and Income Statement Reports include income not yet collected (and thereby not yet reconciled), which results in an inaccurate accounting. Is there a way to filter out unreconciled items and in some cases Actions, which would enable accurate reports. Or a Cash Basis vs an Accrual Basis report. If not, this is a critical feature that should be added (it was in Quicken 2007).

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volvogirl

Why/how do you have income not received recorded in your accounts? Maybe you need to run it through a intermediate holding account.

NotACPA

If you're not a CPA, or have a CPA running your books, Accrual accounting is too complex to bother with. Stick with Cash basis where income is recorded when received and expenses are recorded when paid.

jacobs

If you're trying to do things on an accrual basis, then you need one or more additional accounts. For instance, counting revenue not yet received means the amount not received is accounts receivable. You can do this in Quicken: you'd enter a transaction in an Accounts Receivable (asset) account categorized to the appropriate income category. When the payment is received, you'd do a transfer from Accounts Receivable to Checking, reducing the former and increasing the latter. Similarly, if you receive payment in advance of the revenue being earned, you'd enter the deposit in the Checking account as a transfer to a Prepaid Income (liability) account. When the service is rendered/revenue is recognized, you'd create a transaction in the Prepaid Income account categorize to the revenue category. The same could be done on the expense side, with Accounts Payable and Prepaid Expenses accounts.

That all said, while you can use Quicken like the to emulate double-entry bookkeeping, it's not inherently built for this type of business accounting work. I've done it to keep the books for a small business and for a small national association. But for most people, it's extra work which is easy to get out of whack; Quicken may not be the best tool for doing the accounting for an accrual-based business.

jimbean2

To Jacobs. This is a great workaround but requires a lot of manual entry. This feature was built into Quicken 2007 and worked perfectly (which allowed you to filter reporting by including "Reconciled or Non-Reconciled" entries).

jimbean2

To NotACPA - Please do not comment your opinions since they do not add anything to solving the question.

NotACPA

jimbean2 said:

To NotACPA - Please do not comment your opinions since they do not add anything to solving the question.

Re-read my credentials, which are part of my signature lines. I AM an expert in Cash vs. Accrual accounting (Bank Audit VP) ... and what Q calls "accrual accounting" really isn't.

jacobs

@jimbean2 You're right; doing true accrual accounting in Quicken requires a lot of manual work! I was just illustrating that it can be done, but as I said, most people would not want to jump through those hoops.

The issue of simply being able to filter a report by transactions which are or are not reconciled seems to come up repeatedly in this forum, so I just created a new Idea post requesting this functionality. Idea posts are forwarded to the developers if they get a significant number of votes here. So please take a few seconds to click on this link to the Idea post and vote for it. (To vote for ideas on this site: in the yellow box under the top post, click the little arrow under the vote counter; you will see the vote count increment and the arrow will become grayed out.) Also feel free add a post explaining why you feel this feature would be beneficial; the developers will look at the comments to try to understand why users want it, how they would use it, and what the full scope of the issue is.

jacobs

@jimbean2 I also meant to add the workaround for this feature missing from reports; it's not as flexible as you may need, but in case it helps:

While you can't filter on the CLR (reconciled) status of transactions in a report, you can do so in a register and generate a report from the filtered register.

Click in the left sidebar on the account or account group you want included.
Set the date range of transactions you want.
Then click on the header of the "Clr" column to sort the register by status; it will sort them by reconciled (green checkmark), cleared (blue check mark) or uncleared (blank).
If you want a report of just the reconciled transactions, or just the unreconciled transactions, click on the first such transaction, scroll to the end of those transactions and and Shift-click on the last such transaction, so all the reconciled or unreconciled transactions are selected.
You can now print a report of the selected transactions by clicking Print and selecting "Include: Selected transactions only" in the pop-up dialog box.
Alternatively, if you need to do additional filtering for the report, you can export the selected transactions to a spreadsheet: File > Export > Register Transactions to CSV File. In the dialog box, select "Export=Selected transactions only". Open the .csv file in Excel or Numbers, and sort by Category, then date.