Cash versus Accrual Accounting

[Mike or Penny Novack]

John Morris wrote:

>
>  So, does anyone have ideas of how to make cash accounting work in GnuCash? I found http://wiki.gnucash.org/wiki/Cash_Based_Accounting suggesting that GnuCash support for cash-based accounting is still in the discussion stage, so I don't expect to find a setting anywhere.
>

It isn't that gnucash doesn't support cash based accounting (it does) 
but that the "business features" extension doesn't. I doubt it will make 
you feel any better, but even the "accrual" business features don't 
support some bits (and this is true for many of the commercial 
alternatives). For example, there is no way to have invoices indicating 
some items not "due" till a future date and so those show up in the 
"overdue" reports before they should <<for example, a non-profit often 
has PLEDGES made to it and those ARE "receivables" as a pledge is 
technically enforceable. But a pledge might be in the form $1000/year 
for the next five years and that is NOT the same as $5000 due 
immediately. Ideally the non-profit would like to be able to produce 
statements showing any balance due NOW. Trust me, I see statements from 
non-profits using this or that commercial product getting this wrong>>

What you want here is an invoice feature separate from "receivables".

Suggestion. Gnucash MIGHT be able to deliver what you want via a set of 
subsidiary books. In other words, separate from your main books (used to 
show income and expenses for tax purposes, kept on a cash basis) you 
might be able to devise a set of books for "billing" kept on an accrual 
basis that would let you produce invoices and the aging reports, etc. I 
haven't put on my analyst hat enough to see exactly how best to be done 
and of course there is the added work of entering the incoming payments 
in two places, but I think would be possible. In large systems would be 
a separate receivables system that fed the main books instead of 
manually entering twice.

Michael D Novack, FLMI