Reporting is important and helps organizations in creating a better environment for all involved parties. Some companies prefer entering and recording data on an accrual basis while others prefer a cash basis. QuickBooks enables you to easily change how transactions are recorded and reports are created. QuickBooks enables users to create books and create reports on either an accrual or cash basis. Learn how to change from accrual to cash basis in QuickBooks Desktop.
What is the Accrual Basis and Cash Basis in QuickBooks Desktop
Accrual Basis
Transactions like income and expenses are reported as soon as an invoice or bill is received. Accrued income and expenses are recorded as accounts receivable and accounts payable.
- Preferred By large organizations
- Requires professional expertise and deep knowledge of the basics of accounting
Cash Basis
Transactions are only recorded when said amount is received or paid against them. Only cash transactions are recorded in the books. For more on a Cash basis, check out this article.
- Preferred by small businesses
- Requires a basic understanding of bookkeeping
It is better to try and change the basis of accounting in reports before changing it for your entire company file. Both methods of recording income and expenses can work for your company.
How to Change from Accrual to Cash Basis in QuickBooks Desktop
Most organizations prefer recording income and expenses on an accrual basis as they can get a better picture of their financial strength at the end of the year. Learn how to change from accrual to cash basis in QuickBooks Desktop.
- Firstly go to the Reports menu.
- Select the report you want to create.
- Now select the Customize section.
- In the general section click on the accounting method
- Select Cash Basis after that finally click Run Report.
The accounting method for your company file will be changed. You can easily change the settings by following the aforementioned steps and selecting the accrual basis. You can even give us a call at our QuickBooks consultant number and talk to our Experts.
