Cash vs Accrual P&L Income account imbalance

rbme

Hello,

I don't know if I selected the right location.  I have run 2 P&Ls.  Once Cash and one Accrual.  The balance of the income account in Cash is higher than the Accrual income balance.  I may be confused but to my thinking this means that I have received more than I have invoiced.  Could anyone clarify if this is the case and if yes, where I might be able to find the error.

 

Many thanks

 

Mike_James

Hi @rbme , welcome to the forum. Have a look at the value of debtors in your balance sheet at the beginning and end of the period of the income report. If the ending value is less than the starting value, that would explain the difference. 

 

To take a simple example, if a business had $100 owed to it at the beginning, and nothing owed to it at the end, and raised no sales invoices during the period. the cash report would show $100 of income (ie receipts) and the accrual report would show nothing.