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Re: Does Your Business Use Cash or Accrual Method Accounting?


@jessbru99568wrote:

"Just to be semantically accurate, If you use QB you use accrual accounting"

You can select in QBs whether you are on cash or accrual basis. 

 

 

 


Not really, what you are selecting is reporting on cash basis, the actual accounting you do is accrual based.  If that were not true, and you actually could limit the accounting entries to cash based only - how would you be able to toggle from cash to accrual in reporting?

 

Cash means just that, no a/p or a/r.

 

@  everyone else

I guess it depends on your client base, if your clients/customers take, as the song says, "years and years to pay" then I can see why cash basis is important.  But in reality, the total amount of a/r carry over into next year is insignificant for any business I have ever had. 

And if you use inventory items, accrual is so much more accurate.

 

Taking things to the extreme, no one pays, is IMO kind of like statisics, sure it makes you sit back and go whoa, but reality is people pay, or your criteria for advancing credit needs to be reworked.