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Obviously, if ProAdvisors select the option to Don’t create a summary, you still have missing data, but you also are keenly aware that your history isn’t reliable since it doesn’t exist at all. You're not going to believe it could be accurate when it isn't.įurthermore, this option provides the ability to enter your own starting balances in as much detail as you wish, even on a class-by-class basis or inventory item-by-item basis. Non-accountant users of QuickBooks typically use the Transaction before a specific date functionality. ProAdvisors using the Accountant version of QuickBooks or QuickBooks Enterprise have a variety of options ( shown below). If you use Class tracking, you might as well forget about having comparative financials tied to class. Because individual transactions that had been associated with unique classes prior to condense are summarized within the condense transaction journal entries without any class association, all amounts associated with such transactions will be reported as "unclassified" when you run reports reflecting that data. This makes meaningful period comparisons by class impossible. Since all detail level reports within QuickBooks draw their data from items within the transactions. They will be in error after a condense since there are no more invoices and bills (as well as related transactions), and accordingly, no more transaction item details upon which to build the detail reports. Most of the problems I just outlined for the A/R side of the house exist respectively for the A/P side after condense. While in theory, the A/R balance subsequent to the condense process should be correct, the collective A/R summarized in the condense transaction journal entries are recorded under “no name.” Therefore, you cannot trace back A/R on a customer-by-customer basis within the condensed file.Ī similar situation occurs in terms of Accounts Payable, bills and bill payment checks no longer exist and the expenses are no longer linked to cash payments, so QuickBooks cannot know when to report cash basis related expenses. One additional side effect impacts "customer-based" accounts receivable. Accordingly, sales tax reports will be inaccurate in terms of taxable sales and tax liability. Since the Invoices no longer exist, the details related to sales tax no longer exist including the amount collected for the invoice. While the condense journal entries created via the Condense Utility credits income for invoices condensed, the details do not exist to determine which portions of that income are taxable and which were non-taxable. In reality, QuickBooks doesn’t even know the original invoice and payment ever existed.Ī side effect of this impacts Sales Tax reportability. Neither the invoice or payment exist any longer in QuickBooks, so the program doesn't know that an invoice for March 1 was paid on April 1. QuickBooks knows to include the invoice in cash basis income for April 1. But after running Condense Data, your cash basis reports will be inaccurate, because the income is condensed into the March (condensed transaction) journal entry and the cash is condensed into the April (condensed transaction) journal entry. If you enter an invoice on March 1 and a payment on April 1, the histories show they are linked. There are no links from Cash-in to Income, or from Cash-out to Expenses. Let’s look at some examples of why this can occur. Many users, and even ProAdvisors, report they had no idea that the actual values could change. This means the negative history becomes a permanent part of the value of the inventory and it cannot be corrected in the manner that's appropriate for such transactions.Įven under the best of conditions, the Condense Data Utility still negatively impacts your financials. Take for example a common form of QuickBooks file corruption related to the actual quality of the data as opposed to the integrity of the data. If your file contains historical negative inventory and you condense the data, the impact of that negative history is captured in the summation of the inventory transactions. An all too often reason why some people try to condense is the presence of corrupted data they believe will be eliminated or resolved as part of the condense process. 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