Transactions/All accounts VS Net Profit
jkorola
Member Posts: 2
Hello, could anyone please help. I use wave for very basic needs, only enter my income and expenses. When I look at transactions of all accounts I assume it shows the profit (my income minus expenses). But when I do profit and loss report for all times it gives me different figure. I am confused why this is happening!
0
Comments
Hi @jkorola , thanks for your message here. This can definitely be a bit confusing! I'll expand on what's happening here below.
Your Profit & Loss report shows your income minus expenses, and therefore shows the net profit. This report is also on an accrual basis, meaning that it shows both paid and unpaid income/expenses. Since it's accrual (paid & unpaid), it means that it might not match your account balances, which are operating on a cash basis (paid only). So in Accounting > Transactions, you're seeing the real-time, 1-day cash value of your accounts, whereas in the P&L, you're seeing the net profit of the business for a larger time period. You can change your P&L to cash basis if you'd prefer to see your report that way!
This Help Centre article is also a great resource: https://support.waveapps.com/hc/en-us/articles/360041245892-Accrual-vs-Cash-Basis-Reporting