QuickBooks Online: Fix Accounts Receivable Appearing on the P&L

Seeing Accounts Receivable showing on the P&L in QuickBooks Online can be confusing—and alarming. Accounts Receivable (AR) should appear on the Balance Sheet, not the Profit & Loss (P&L) statement. When QuickBooks Online AR shows as income, it usually signals a setup or posting error that can distort your financial reports.

In this guide, we’ll explain why Accounts Receivable appears on your P&L in QuickBooks Online, how to fix it step-by-step, and how to prevent it from happening again.

If you need immediate help, call QuickBooks Online Financial Statements Help at 844-753-8012.

Why Is Accounts Receivable on My P&L in QuickBooks Online?

The most common reason for QuickBooks Online AR on Profit & Loss is misclassification. AR is a balance sheet asset, but if it’s set up incorrectly or used improperly, QuickBooks may treat it like income or an expense.

Here are the main causes of the QuickBooks Online P&L Accounts Receivable problem:

• Accounts Receivable account type is incorrect
• AR was created as an income account
• Journal entries posted directly to AR
• Invoices bypassing the AR account
• Chart of Accounts setup issues

Any of these can lead to AR appearing on QuickBooks Online P&L.

How Accounts Receivable Should Work in QuickBooks Online

To understand the issue, it helps to know the correct workflow:

• Invoices increase Accounts Receivable (Balance Sheet)
• Payments received reduce Accounts Receivable
• Income is recorded through products/services, not AR

When this flow breaks, P&L shows Accounts Receivable instead of the Balance Sheet.

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Step 1: Check the Account Type for Accounts Receivable

The first step to fix Accounts Receivable on P&L QuickBooks is verifying the account setup.

How to check:

1. Go to Settings ⚙️ > Chart of Accounts
2. Find Accounts Receivable
3. Confirm:
   • Account Type: Accounts Receivable
   • Detail Type: Accounts Receivable (A/R)

If AR is listed as Income or Other Income, that’s why QuickBooks Online AR is showing as income.

⚠️ Note: You cannot change the default AR account type—if it’s wrong, it was likely created manually.

Step 2: Look for Duplicate or Custom AR Accounts

A common QuickBooks Online chart of accounts issue is having more than one AR account.

Check for:

• “Accounts Receivable”
• “AR”
• “Trade Receivables”

If invoices or journal entries are posting to the wrong one, it causes QuickBooks Online AR income misclassification.

👉 Only one AR account should be used for customer invoices.

Step 3: Review Journal Entries Posting to AR

Another major reason for P&L reporting error in QuickBooks is manual journal entries.

What to do:

1. Run a Transaction Detail by Account report
2. Filter for Accounts Receivable
3. Look for Journal Entries

AR should usually be affected only by invoices, payments, and credits—not journal entries. Improper JEs can cause QuickBooks Online AR misclassified on Profit & Loss.

Step 4: Check Product and Service Income Accounts

If QuickBooks Online AR is showing as income, the issue may actually be your products/services.

Fix this by:

1. Go to Sales > Products & Services
2. Edit each item
3. Ensure the Income Account is:
   • Sales
   • Service Income
   • Product Income

❌ Do NOT assign Accounts Receivable as an income account.

This step is critical for correct Accounts Receivable reporting in QuickBooks Online.

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Step 5: Re-run Your Profit & Loss and Balance Sheet

After corrections:

• Run Profit & Loss
• Run Balance Sheet
• Compare date ranges

If fixed properly:

• AR will no longer appear on P&L
• AR balance will show under Assets

This confirms you’ve successfully completed how to remove Accounts Receivable from P&L.

Step 6: Use QuickBooks Online Financial Statements Troubleshooting

If the issue persists:

• Clear report filters
• Confirm accounting method (Cash vs Accrual)
• Check for merged or inactive accounts
• Review opening balance entries

These steps help resolve deeper QuickBooks Online financial statements troubleshooting cases.

Common Mistakes That Cause AR on P&L

Avoid these errors to prevent future problems:

• Posting journal entries directly to AR
• Creating custom AR income accounts
• Recording invoices without using “Receive Payment”
• Editing default system accounts

These mistakes often lead to AR appearing on QuickBooks Online P&L again.

When to Get Professional Help

You should contact an expert if:

• AR still shows on P&L after corrections
• Financial statements are already filed
• Multiple periods are affected
• You’re unsure how to fix P&L errors in QuickBooks Online

📞 Call QuickBooks Online Financial Statements Help at 844-753-8012 to fix AR misclassification safely and accurately.

Final Thoughts

If you see Accounts Receivable showing on the P&L in QuickBooks Online, it’s a clear sign something isn’t set up correctly. The good news? With the right steps, it’s completely fixable.

By reviewing your chart of accounts, transactions, and product settings, you can restore accurate financial reporting in QuickBooks Online and eliminate misleading P&L errors.

For fast, expert assistance, contact QuickBooks Online Accounting Help at 844-753-8012.

Frequently Asked Questions