Cash Flow Report Problem

Robert Locke lists at ralii.com
Sat Mar 1 09:54:22 EST 2014


On Sat, 2014-03-01 at 09:23 -0500, Mike or Penny Novack wrote:
> >When I started doing the non-profits, I simply "copied" my activities
> >that I had done for the consulting business, read use the Cash Flow
> >report to generate the P&L. But the reality of the non-profits is that
> >there are no "Accrual" accounts (A/R or A/P). In other words all the
> >transactions are cash based. So, until this morning I had not
> >entertained the idea of going back to the built-in P&L because Cash Flow
> >was working whether I had Accrual accounts or not.
> >
> >--Rob
> >
> >  
> >
> Whether "cash flow" could be used that way depends on all of the cash 
> affecting transactions of the non-profit being "income" or "expense", 
> never something else. For example, a non-profit gets to choose its 
> policy for fixed assets and their depreciation, but whatever policy it 
> adopts it has to use. The ones for which I keep books have a high enough 
> "de minimum" that USUALLY durables purchased can be expensed immediately 
> but not ALWAYS and when one of those special situations arises will be 
> for a largish amount.
> 
> Possibly non of the non-profits for which you keep books run into this?
> 
> Also, while it is common for non-profits to sometimes choose to use 
> business features like A/R to track memberships (be able to produce 
> membership statements) it isn't REALLY accrued income for them when 
> invoiced. While a formal "pledge" to a non-profit can be properly 
> considered a receivable, a membership carries no obligation to continue 
> as a member.
> 

Yes to all of that, and I wasn't even going to go into the carrying of
Inventory and expensing at the time of sale to COGS. I am fairly well
versed in the accounting aspects of all of this including accrual vs.
cash.

But, back to my original complaint, it still doesn't justify the new
Cash Flow report "merging" Income and Expense activity into one or the
other simply based on which one is larger.

--Rob




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