Need clarification about the P&L Report.
P&L Report shows the Inventory-Cost for only those Inventory which are Sold for a specified period (Say May 2016)???
So in my case, my Sale Invoice of previous year (2014) is showing up in May 2016 P&L Report as Inventory Sale. Why is that so?
What was Sold in May 2016, only those Inventory Cost should show in P&L Report, right?
Is this the right way to read the P&L Report?
The Profit and Loss Statement on the Summary page reports those transactions involving income and expense accounts between the dates specified under Set Period (at the top of the Summary page). The date range is visible in the heading on that page.
Profit and Loss Statements under Reports can be created for any date range. They, too, specify the date range for primary column in their headers. Comparative columns for other date ranges can be added to such reports.
Without seeing your records, it isn’t possible to know exactly what is happening. But I suspect you just have a date wrong somewhere. Drill down by clicking on the blue account balances in the report to see exactly which transactions contribute to the account balance. I think you will soon find the error. If not, tell us what you find.
Are you using Cash Basis accounting ? - check under Summary tab - Set Period.
When using Cash Basis your transactions don’t show in the P&L until cash has been involved.
If you did a Sales Invoice in 2015, but weren’t paid until May 2016, then the transaction wont appear in the P&L until May 2016. If you use Accrual Basis then the transaction would have appeared in 2015
Thank you for your prompt reply @Tut and @Brucanna
My first question is, Does Profit and Loss Report Shows Only those Inventory Cost (under expense) Which are Sold (inventory-sales under Income) for a specified period?
All the Reports are Accrual Basis.
Generally, only those Inventory Costs which relate to Inventory Sales show in the P&L
Some exceptions are stock adjusts, write offs etc.
Thank you for your reply @Brucanna
So that is what happened in my books of accounts.
There was negative Stock adjustment for 2014 Sales Invoices of which, Inventory was purchase of May 2016.
(We are in WIP for previous years data entry in Manger, so Purchase of 2014 Inventory might have not yet entered, thats why the Sales invoice of 2014 in reference is reflecting as negative stock)
So in P&L Report of May 2016, Inventory Cost shows Sales Invoices of 2014.
But my concern was that 2014 Sales Invoice should not reflect in P&L Report of May 2016 under Inventory Cost.
As, [quote=“Brucanna, post:5, topic:5941”]
only those Inventory Costs which relate to Inventory Sales show in the P&L
[/quote]
You should try and process all past transactions (sales, purchases etc ) roughly in date order together otherwise you will continue to run into the problems as highlighted above.
The 2014 Sales Invoice Inventory Cost will reflect in May 2016 P&L as there is no stock available to expense until May 2016. The 2014 Sales Invoice can’t create 2014 Inventory Cost if there is no stock to expense at that time.
Furthermore, the 2016 cost of the Inventory may be different to the 2014 cost, therefore you are expensing 2016 inventory against 2014 sales which will mean that in the future you will be expensing 2014 inventory against 2016 sales after the catch up in the processing.
To avoid this you should focus on the previous years data first and then catch up on 2016 at the end.
Yes, Thank you for the clarification.
We are now working on the same.