FischBooks answers: “HELP! I Converted from QuickBooks Desktop to Online and my Financials don’t Balance!”

The most important step immediately following the conversion process when going from QuickBooks Desktop to QuickBooks Online, is checking that the Financial Statements for both company files balance to each other. In most conversions I’ve done, there is usually no issue with the Profit & Loss Statement. QuickBooks Online does a great job at maintaining account hierarchies as well (not pictured here – you’ll have to trust me on this one).

Compare financials

However, there is a consistent discrepancy with Balance Sheets when it comes to Accounts Receivable or Accounts Payable and tax liability accounts.

Balance Sheet

In most cases, it is because of how QuickBooks Desktop manages tax differently from QuickBooks Online. QB Desktop turns tax into a Customer Receivable or Vendor Payable, which is actually incorrect according to accounting standards. These amounts should stay on the Balance Sheet as a liability. This is why you will always see two tax accounts for each tax type in QB Online. One is the Payable (current activity for that tax liability) and the other is a Suspense (prior period activity where the return has already been done, but the payment has not yet been made or the refund has not yet been received).

The trouble comes when you try to convert a file that has a Customer AR or Vendor AP balance having to do with a tax return. Notice how the AR includes the refund on the Desktop side, but the Online side does not:

Rec Gen AR

And here is an example of what that looks like when there is a payable owing:

Rec Gen AP

During the conversion, the amount has moved from the AR or AP to the newly-created Suspense account on the Balance Sheet.

Rec Gen Suspense

You now have two options: 1.) Move the balance back to AR or AP since that tax return has already been filed anyway, or 2.) Leave it where it is and just make sure when the tax payment is made or tax refund is received, that you offset the Suspense account.

Which is your preferred method? Do you have other Conversion questions? Join the discussion on Facebook in our QB-HQ Facebook Group – Your QuickBooks Head Quarters for Tips, Tricks and Training.


FischBooks’ Must-Have QuickBooks Labs

I love QuickBooks Labs. They are great insights into what the Intuit development teams are working on that will make our QBO lives a little sweeter. Whether converting from QuickBooks Desktop or starting a QBO company file from scratch, there are four QuickBooks Labs that are now my default settings.

To access these Labs, click on the Company Gear Icon at the top right of the screen.  Then select QuickBooks Labs at the bottom of the first column entitled Settings.QuickBooks LabsFeel free to take a peek at the ones I am not mentioning, but my four must-haves are as follows:

  1. Directory View for Vendors – The Customer Centre has had the Directory View for a while now and my clients and I like consistency. By selecting this option, the Supplier/Vendor Centre operates like the Customer Centre. The Supplier list that appears on the left within a Supplier Detail screen makes it really easy to switch between Suppliers.Directory View
  2. Redesigned Reports – Reports just keep getting better and the Redesigned Reports are no exception. Create even more professional-looking reports that are sure to impress and customize even easier using simpler navigations.Redesigned Reports
  3. Autocomplete Widget – This great shortcut tool makes it incredibly fast and easy to add Customer and Supplier contacts into QBO. Using public directories, start typing the name of a contact and QBO will do the rest.Autocomplete Widget
  4. Collapsible Left Navigation – Maximize your work area by collapsing the left navigation bar.Collapsible Left Nav

All QuickBooks Labs features have mini videos demonstrating the tools, as well as Learn more (takes you to lots more online information), See demo (plays the mini video), and Give feedback (let Intuit know what you think of these innovative Labs).

Previous Labs submissions have turned in to permanent features of QBO. Here’s hoping these four will be added to our normal workflow soon.

Which Labs do you love? Which can you do without? Join the discussion on Facebook in our QB-HQ Facebook Group – Your QuickBooks Head Quarters for Tips, Tricks and Training.