Accrual / Cash Acct

[Graham Stoddart-Stones]

Christopher: 


The first thought that occurs to me is Cash Flow. If the details in your bank account in Gnucash do not immediately reflect what has actually happened in your real bank account, then it is theoretically possible for you to feel that you have more money than you actually do - with potentially embarrassing results if you overdraw your account. 


If your bank balance is comfortable enough to avoid running into this issue - or you have a savings account from which your checking account can automatically draw if necessary - then congratulations, and please ignore my thought! 


Graham 

----- Original Message -----

From: "Christopher Lam" <christopher.lck at gmail.com> 
To: gnucash-user at gnucash.org 
Sent: Friday, 18 January, 2013 5:17:56 PM 
Subject: Accrual / Cash Acct 

Dear All, 

I understand this is more bookkeeping than gnucash type question, I 
thought I'd give it a try: 

I've been using Gnucash successfully for the past 2 years now, and 
I've always used the date as it appears from the bank statement to 
record my transactions. This means I usually wait a few days for the 
bank to release the statement onto onlinebanking to record the 
transactions. I understand this may be described as (modified) Cash 
Accounting. 

On the other hand, from my understanding of reading 
bookkeeping/accounting guides, they usually advocate using the Invoice 
Date or Date of Transacting (i.e. buying shares... buying a house... 
doing work for a client for later billing/payment processing), or, as 
is better known as, Accrual Accounting. 

I have little inclination to change my practices especially that I 
understand some of the risks. I prefer trusting my bank statement far 
more than I wish to enter individual transactions and try reconcile 
every month. But does anyone have any particular advice on what 
exactly I'll be missing by this method? 
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