Switch between cash and accrual

Steps

1. 1

   Step 1: Open Settings › Accounting basis.

2. 2

   Step 2: Under Default basis, pick Cash or Accrual and press Save.

3. 3

   Step 3: On any report, use the Cash, Accrual or Both toggle to see the other view without changing the default.

4. 4

   Step 4: To build accrual books from a cash history (or the other way), set From and To under Accrual view and press Build accrual view. Review the result and press Approve and post.

Which one to use

• Cash counts money when it moves. Many small companies file taxes on cash.
• Accrual counts revenue when you earn it and costs when you incur them. Investors, lenders and audits usually expect accrual.
• Home's cash, burn and runway are always on a cash basis, whatever the default.

Good to know

• A conversion shows Judgment call items for you to answer, and a Memo for your CPA. Undo it from Accounting › Activity.

Related articles

• Spread prepaid costs, deferred revenue and accruals
• Find your P&L, balance sheet and cash flow
• Post a journal entry