Accrual Accounting in QB Online

Good day, @joel-davis-ciphe.

Thanks for reaching out to us here in the Community. I can help change the accounting method in QuickBooks Online (QBO).

Since your company runs on a cash basis, you'll have to change your settings to accrual. This way, any reports you open default to accrual. You can do so by changing it in your company settings.

Let me show you how:

1. Go to the Gear icon at the top.

2. Under Your Company, select Account and Settings.

3. In the left menu, click Advanced.

4. Go to the Accounting section and click the pencil icon.

5. Choose Accrual on the Accounting Method drop-down arrow.

6. Click Save, and then Done.

Once done, pull up the report to double-check. Please know that the information showing on your Dashboard depends on the Accounting method you use or set up on your company settings. 

For more details about the steps above, see this article: Change your accounting method.

I've also added this link to get more ideas about the difference between Cash and Accrual basis for QBO and how to change the method on a report: Choose between cash and accrual accounting methods in reports. 

If you have further questions or concerns, feel free to reach back out anytime. Stay safe.

Thank you.  I understand the mechanics of changing from cash to accrual in Settings, but what happens to my accounts?

We want to switch at 12/31/2021 and run the final cash balance sheet and income statement, then convert to accrual.

What are the steps and checks aside from clicking a button Settings>Accrual

Thanks for your prompt reply, joel-davis-ciphe.

Let me share some insights about your concern.

Changing the accounting method only affects how your accounts and balances show up in your reports. Before following the steps provided by my colleague Maybelle_S, please keep in mind that the IRS requires you to use the same accounting method from year to year.

You also need to file a Form 3115 with the IRS to get permission to change your accounting method. If you're unsure about the process, I recommend consulting your accountant for advice.

For more information about cash and accrual accounting methods, you can read this article: Choose between cash and accrual accounting methods in reports.

You're always welcome to reply on this thread if you have any follow-up questions or other concerns. We're here to help you. Take care and stay safe!

Hi, I have switch cash to accrual by following your instructions, but management reports still are been run in the cash method. Is ther a problem with the program or can you suggest something else.

Hi there, @accrualman. I'm determined to ensure you can have your report package in accrual basis.

The Management report is based on your accounting method set up in the Advanced tab from the Gear icon. I recommend clearing your browser's cache to fix any issues with your web browser.

Browser caches help speed up basic browsing that allows you to save more time when loading repetitive images or information. However, it can impact processes when your browser accumulates too much historical data. 

We can clear them in just a few easy steps. Let's start by accessing your account through an incognito window to rule out the possibility of a webpage issue. You can refer to these shortcut keys to open an incognito window in all supported browsers:

• Chrome: Ctrl+Shift+N
• Firefox: Ctrl+Shift+P
• Safari: Command+Shift+N

Run your management report and verify the accounting method. If they're reporting accrual basis, clear your browser's cache. By clearing them, you can remove that historical data and access QuickBooks with a clean slate. You can also switch to a different supported browser to see if it has something to do with your browser.

Otherwise, I suggest reaching out to our Customer Care Team support. They can take a closer look at your account and perform any necessary action to resolve it.

In the meantime, you can run and customize the reports you require. Then, you can add them to the Management report package. 

Here's how:

1. Open the report you need.
2. Select the date range for the last financial year, select the Accrual method. 
3. Click Run Report.
4. Select Save customization. Give the report a name, add to a group or share if required, and Save.

Now that you have saved the report you want, you can add it to the Management report:

1. Select the Reports menu and select the, Management reports tab.
2. Using the drop-down arrow to the right of the management report you want to change, select Edit.
3. Select the Reports section on the left. Click Add new report to add your custom reports. You can click the Edit icon to edit or remove existing reports.
4. You can also navigate between the Cover page, Table of contents, Preliminary notes, and Endnotes using the options on the left. You will be able to click into each section to add in your own notes, information, and so on. 
5. Use the Print or Preview option at the bottom of the page at any time to view the whole report. Once you are satisfied with the customization, you can click Save, Save and Close, Send, or Export.

You can check out our video tutorial about management reports to get more tips on customizing a professional-looking reporting package. 

I'm always here to help if you need further assistance in getting your desired report. Have a good one,

Good Morning,

I converted from the desktop version of QB to the online version.  When I tried to print a p&L report for our tax accountant on the cash basis, it is not working.  The sales remain the same prior to the conversion and after.  Is it a glitch in the QB online program in converting to cash?  

Hi there, @SP222. 

Let me help you with your report data concerns after converting your data from QuickBooks Desktop to QuickBooks Online.

As you go through the conversion process, you may notice transactions are missing or reports are different and don't match. The reason for this is that QBO and QBDT don't have the same reports. Accrual basis reports in QBO will match your reports in QBDT. However, cash basis reports may differ.

Additionally, I'd attached here an article, that will discuss details about what to expect when converting files from QBDT to QBO: Switch from QuickBooks Desktop to QuickBooks Online. You will know what data doesn't convert when you migrate from QBDT to QBO.

Moreover, if in case you want to switch back to QBDT from QBO, you can check this article link: Convert your QuickBooks Online data to QuickBooks Desktop. This article provides detailed steps in migrating your file from QBO to QBDT. 

You can post additional questions in the comments below, in case you have any. I'll get back to you as soon as I can.