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Track Inventory in Cash Basis

I know that QuickBooks Online doesn't accurately report inventory transactions in cash basis at this time. The IRS publication - https://www.irs.gov/publications/p334/ch02.html - states that small business owners have the option to use the cash method of accounting even if they produce, purchase, or sell merchandise.

Respectfully, I would like QuickBooks Online to support this functionality so that I can run my business in the best possible way.

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    QBO TeamAdminQBO Team (Admin, QuickBooks Online) shared this idea  ·   ·  Flag idea as inappropriate…  ·  Admin →

    14 comments

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      • Caleb L. Jenkins, CQPCaleb L. Jenkins, CQP commented  ·   ·  Flag as inappropriate

        This still needs addressed by Intuit... QBO needs to be able to allow a company to convert a QBDT file to QBO and have Cash and/or Accrual reports be accurate.

      • Brent MeadorBrent Meador commented  ·   ·  Flag as inappropriate

        This is the sole reason we did not convert to QBO. Intuit needs to be able to allow a small company that is cash basis to convert the QBDT to QBO and have the cash or accrual reporting be accurate. The minute Intuit fixes this issue I will be a QBO user.

      • NateNate commented  ·   ·  Flag as inappropriate

        This is a must have. We are going back to the desktop version because this functionality does not exist online. Also you will pay more in taxes using FIFO if your prices are rising. LIFO would be best but at least average cost method used on desktop version is better than FIFO.

      • Karen FarrenKaren Farren commented  ·   ·  Flag as inappropriate

        Agree 100%. In fact QBO conversions from QB Desktop need to be fixed to properly convert all inventory (cash or accrual) without having to make so many adjustments & removing extra COGS items.

      • Caleb L. Jenkins, CQPCaleb L. Jenkins, CQP commented  ·   ·  Flag as inappropriate

        This is something that needs done ASAP. I have a large company file that I tried to convert to QBO and came across this error after the conversion.

      • Ian RochatIan Rochat commented  ·   ·  Flag as inappropriate

        I would love to use QuickBooks Online, but I cannot even consider it until this feature is added.

      • LorriLorri commented  ·   ·  Flag as inappropriate

        Agreed with the comments below: This is a complete defect and needs to be fixed.

      • Anonymous commented  ·   ·  Flag as inappropriate

        This is a defect. Inaccurate = defect. Unavailability = lack of feature. You cannot have cash basis show all inventory purchased to date as COGS.

      • Bliss BookkeepingBliss Bookkeeping commented  ·   ·  Flag as inappropriate

        Many businesses and accountants prefer to follow the accrual method of accounting for inventory even if their tax return is on a cash basis even if they may be exempt from this. It is common practice. The IRS rules even state that in general business are required to report inventories on an accrual basis. Regardless, if the inventory adjustments in QBO are being made and allocated to inventory asset, why doesn't that value show up on a cash basis balance sheet? It does in QB desktop.

      • Anonymous commented  ·   ·  Flag as inappropriate

        The response by Intuit was that this is a "limitation" of QBO and not a defect and however if QBO reports can not correctly show cash basis transactions, then cash basis reports should not be an option since they are misleading the user. The user should not have to verify the accuracy of the switch between cash and accrual reports.

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