Why Bills Sometimes Appear and Sometimes Don’t on Your Profit and Loss Report in QuickBooks Online

This is a question that comes up a lot in my training calls. “Why do my bills sometimes show up on my Profit and Loss report and sometimes don’t?”
 
To understand why this happens let’s start with an unpaid bill.
 
 Unpaid Bill on the Profit and Loss Report

Here’s a $1,252 unpaid bill for insurance that I’ll use for this example:

Example unpaid bill in QBO
 
Let’s see what this looks like on the Profit and Loss report. To get there, click Reports in the side menu:
Opening reports in QBO from the main menu
 
The Profit and Loss report is usually in the Favorites. If not, you can use the search box to find it.
Opening the Profit and Loss report in QBO
 
When I view the Profit and Loss for the date of the bill I can see there’s $1,3252 of Insurance Expense.
An example of the Profit and Loss report in QBO showing an unpaid insurance bill.
 
If I click on the Insurance Expense line it opens up the transaction report showing the $1,252 example bill and a $100 Journal entry.
An accrual basis transaction report showing an unpaid bill.

Accounting Method – Cash vs. Accrual

In the example above the bill shows up on the Profit and Loss. But what if it doesn’t? The reason is the selected Accounting method.

My QuickBooks defaults to Accrual. Accrual shows everything that’s been recorded, whether or not it’s been paid. That means you’ll see unpaid bills and invoices on your Profit and Loss.

If I switch the Profit and Loss report to Cash that Insurance Expense drops down to $100, the bill no longer shows up.

Profit and Loss report with Cash accounting method not showing unpaid bills in QBO

This is because the Cash accounting method only shows transactions after payment has been sent/received.

If I mark that insurance bill paid it will then show up on the Profit and Loss report for both accounting methods.

You now know why a bill or invoice wouldn’t be showing up on your Profit and Loss report.

If you ever have a transaction that you know was entered but you simply can’t find it, you can check the Audit Log.

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Below is a video if you prefer to watch a walkthrough.

If you have questions about the profit and loss report in QuickBooks Online click the green button below to schedule a free consultation.

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