Learn more about the difference between the cash and accrual methods, and how to change between the two in QuickBooks Online.
Cash and accrual are two methods of reporting income and expenses. The same report can paint a different picture depending on the method you pick.
When you use the cash method in reports:
- Your report will count income and expenses when you receive the payment or pay the bill.
- If you sent an invoice or received a bill but the money hasn’t changed hands yet, your report doesn’t include it in your income and expenses.
When you use the accrual method in reports:
- Your report will count income and expenses as soon as you send an invoice or record a bill.
- It will include income and expenses even if the payment has not been made.
Change the method on a report
To see the difference another accounting method will make in your reporting, you can customize an individual report to use a different accounting method and compare the results.
To change the method used on an individual report:
- Go to Business overview and select Reports (Take me there) .
- Select a report.
- Select Cash or Accrual under Accounting method (you can also select the Customize button to open the Customize Report window and change the setting in the General section).
- Select Run report.
Talk to an accountant about which method is most appropriate for your company. For more information, visit find a ProAdvisor page. You can also visit the CRA website to find out more on Accounting methods and the industries to which they can be applied.