QuickBooks profit & Loss Query

hopethisworks

Hi All, this is my very first post on boards so apologies in advance for any errors!

I do books parttime and use quickbooks software. I find it really good but im stumped with the following.

The business has steady stream of money coming in and the current account bank balance increases + week on week after all expenses are paid. However the profit and loss always seems to show a loss. How can it be the QB profit and Loss shows a loss when the business is "making" money?

Any help/advise much appreciated particulary from other QB users!!:)

HcksawJimDuggan

Hi,

For receipts coming in to the bank, are you posting them to account's receivable (Balance sheet) or Sales (P&L)? If you are posting them the accounts receivable, are there sales invoice's been raised for which the payment's are allocated against or is it a cash business?

hopethisworks

Thanks for reply hcksaw,

Its a cash business, all receipts are entered straight away as "sales receipt" and deposited to either current account/cash account. There are no invoices been raised for which receipts at a later date are allocated against.

Any idea on what cause might be?

MBateson

Hard to say without seeing it.

Are you posting the payments of your bills to Accounts Payable or to the P&L? If the P&L, this would lead to a doubling up of expenses as the bills are also debiting there.

Have you very long credit terms with your suppliers? This may lead to the bank balance increasing every week until you pay them even while making a loss as your sales are on a cash basis. Likewise with VAT, you're collecting it in your sales but not paying it for two months at least so it's building in your bank account.

Are you tracking stock on the QB file?

smeharg

Reconcile the sales per quickbooks to cash received per bank; and purchases/expenses to payments per bank and/or outstanding creditors.

There's no point in looking at the loss and scratching your head: you need to examine the constituent parts.