A Step-by-Step Guide to Creating Expense and Purchase Reports in Quickbooks Online

 Reviewing Expense and Purchase Reports

Using Product and Service items in expense transactions offers the benefit of enabling clients to generate item profitability reports. Nonetheless, incorporating items into expense transactions may influence the type of report they choose to access the desired information.
Expense reports are based on accounts, and purchase reports are based on items.

The Purchases by Vendor Detail report

This report exclusively encompasses transactions where a Product and Service item was inputted on the distribution line instead of an account. However, if your client aims to ascertain their expenditure with a particular vendor, this report might lack accuracy if either you or your client previously entered purchase transactions and directly posted them to accounts. 

Moreover, this report encompasses transactions categorized under both balance sheet accounts (e.g., inventory asset) and Profit and Loss accounts (e.g., job costs expense), provided that the items in these purchase transactions were linked to those respective accounts.

The Expenses by Vendor Summary report

The Expenses by Vendor Summary report specifically displays vendor activity recorded solely within expense accounts, even in cases where a Product and Service item was utilized. This report does not include amounts posted to balance sheet accounts. For example, it does not capture purchases of fixed assets or other assets, nor does it reflect payments towards the principal portion of a loan.

The Transaction List by Vendor report

The Transaction List by Vendor report compiles all posting transactions associated with vendors, regardless of whether they were posted via account or item. Additionally, it encompasses non-posting transactions like purchase orders.