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Subject Author Date
P&L doesn't show all expenses. Jimmy Stewart 08-26-2006
Posted by Jimmy Stewart on August 26, 2006, 7:21 pm
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 This is more of an accounting question but...

I ran a P&L statement from QB and upon study I noticed a glaring omission
from the report, my monthly payment for my vehicle. This got me to thinking
about what else wasn't on this statement that I have been using to judge my
success on a regular basis. Things like money I take out of the business and
(once I get an employee anyway) payroll expenses.

Now I realize that when I make a depreciation entry for the truck at years
end, the P&L will reflect those payments as one lump sum but is there a way
to manipulate the P&L so that is shows those payments on an ongoing basis?

This primarily came to light as I was setting up a budget and after entering
all of the amounts, I realized that this was not an accurate accounting of
the money entering, or more specifically, leaving the business each month.




Posted by HeyBub on August 26, 2006, 7:33 pm
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 Jimmy Stewart wrote:
> This is more of an accounting question but...
>
> I ran a P&L statement from QB and upon study I noticed a glaring
> omission from the report, my monthly payment for my vehicle. This got
> me to thinking about what else wasn't on this statement that I have
> been using to judge my success on a regular basis. Things like money
> I take out of the business and (once I get an employee anyway)
> payroll expenses.
> Now I realize that when I make a depreciation entry for the truck at
> years end, the P&L will reflect those payments as one lump sum but is
> there a way to manipulate the P&L so that is shows those payments on
> an ongoing basis?
> This primarily came to light as I was setting up a budget and after
> entering all of the amounts, I realized that this was not an accurate
> accounting of the money entering, or more specifically, leaving the
> business each month.

Your monthly payment for a truck isn't an expense, per se. You are moving
funds around on the balance sheet. Likewise, an owner's draw isn't an
expense either; you're simply trading one asset for another (converting
equity to cash).

The easiest way to keep up to date is to produce a balance sheet in addition
to a P&L and compare them month-to-month.



Posted by Peter Saxton on August 27, 2006, 1:18 am
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wrote:

>This is more of an accounting question but...
>
>I ran a P&L statement from QB and upon study I noticed a glaring omission
>from the report, my monthly payment for my vehicle. This got me to thinking
>about what else wasn't on this statement that I have been using to judge my
>success on a regular basis. Things like money I take out of the business and
>(once I get an employee anyway) payroll expenses.
>
>Now I realize that when I make a depreciation entry for the truck at years
>end, the P&L will reflect those payments as one lump sum but is there a way
>to manipulate the P&L so that is shows those payments on an ongoing basis?
>
>This primarily came to light as I was setting up a budget and after entering
>all of the amounts, I realized that this was not an accurate accounting of
>the money entering, or more specifically, leaving the business each month.
>

Charge depreciation on a monthly basis - why should doing it on a
yearly basis get shown in the accounts on a monthly basis?

The monthly payments on your vehicle are part repayment of capital and
part interest payment. You need to split the payment between the two
using an appropriate method.

Drawings are not a P &L item.

Payroll should appear on the P & L correctly when you have an
employee.

--
Peter Saxton from London
peter@petersaxton.co.uk

Posted by N Owen on August 27, 2006, 6:46 am
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>This is more of an accounting question but...
>
>I ran a P&L statement from QB and upon study I noticed a glaring omission
>from the report, my monthly payment for my vehicle. This got me to thinking
>about what else wasn't on this statement that I have been using to judge my
>success on a regular basis. Things like money I take out of the business and
>(once I get an employee anyway) payroll expenses.
>
>Now I realize that when I make a depreciation entry for the truck at years
>end, the P&L will reflect those payments as one lump sum but is there a way
>to manipulate the P&L so that is shows those payments on an ongoing basis?
>
>This primarily came to light as I was setting up a budget and after entering
>all of the amounts, I realized that this was not an accurate accounting of
>the money entering, or more specifically, leaving the business each month.
>
>
>
Use the Statement of Cash Flows to reflect the cash movement. (after you
have correctly split your truck payment between principal & interest.)
N Owen
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