2 ms·
actually accrual accounting is 5 times easier than cash. perhaps with the tool like quickbooks, this is not so obvious but accrual is CORRECT accounting and eve
by lubos 17y ago
actually accrual accounting is 5 times easier than cash. perhaps with the tool like quickbooks, this is not so obvious but accrual is CORRECT accounting and every business out there should use it whether you pay your taxes on cash-basis or not.
let me explain, when you give customer an invoice, you want to see in your books that this person owes you $1000. on cash-basis you would completely ignore this transaction for accounting purposes until client pays which is non-sense as it could be easy to forget this invoice forever and never receive payment for your products or services.
people get confused but cash-basis accounting is not really an accounting, it's just calculation method for your taxes.
- gte910h 17y agoOutstanding invoices are quite clearly still shown in my accounting program. They're not counted on income until the event of payment though. The invoicing program even auto-reminds late payers when they're past due. I can generate reports to show my company's AR whenever I want and open to a dashboard of that screen actually Losing track of AR is just poor bookkeeping. It's not a feature of cash bookkeeping. My AP is not as well tracked, that's for certain. Once expenses are paid, that is tracked, for sure, but owed debts/bills/etc aren't. That never was really something that interesting in the accrual based system.