On 6/17/2017 11:42 AM, Martijn Heuts wrote:
Hello, the P&L report in GNU Cash looks into all transactions from the income
accountbut the income account does not show what is collected, only what is charged
out.
Isn't a P&L report based on the actual business income (not what is charged
out), less expenses, which would equal net profit?
I ask because the P&L is not what I collected, I have clients who only paid 50%
deposit and/or waiting on insurance money to come in, yet the P&Lcalculates the
total charge out as income.
My cash flow report shows me the actual income from accounts receivablethen my
P&L report shows me the actual charges and expenses.
The 'Cash Flow' report 'income' section less the 'P&L report' expenses would be
my net profit, correct?
Thanks for your help! Have a great weekend!
Martijn
Fundamentals
a) The difference between keeping books on the cash basis and keeping
books on the accrual basis << review that >>
Note that the business features of gnucash are available only on
the accrual basis.
b) The difference between cash flow and profit and loss << review that >>
These are VERY different. Again you are thinking of "cash in hand"
meaning making a profit. But consider, suppose that during some time
period your inflow of cash is 1000 and your outflow of cash for current
expenses 500. During that same time period you had other (non cash)
expenses like depreciation of 500 and your business tax liability went
up by 200.
Your cash flow is fine, but you have a loss, not a profit.
Gnucash is an excellent bookkeeping application. It makes bookkeeping
easier. But you still have to learn the fundamentals.
Michael D Novack
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