Cash versus Accrual Accounting

[Mark Phillips]

John,

I guess I don't really understand the problem. When you post an invoice,
the documentation says it goes into your A/R account. Income is not
affected until the invoice is paid, unless you changed the accounts used by
the invoicing module.

Gnucash runs business accounts on the accrual method. Converting from
accrual accounting to cash accounting is not a huge effort if you
understand the differences. You can most likely create cash basis
income/expense reports and accrual basis income and expense reports using
the report generator by selecting the correct accounts (I have not tried
this ymmv), or an export to a spreadsheet.  I don't think you need a
separate set of books.

However, I am not an accountant, but I do use Gnucash for my business and
personal accounts - those are two separate sets of books, btw. ;)

Just my 2 cents.

Mark

On Fri, Oct 3, 2014 at 12:17 PM, John Morris <johnjeff at editide.us> wrote:

> Hi Mike, Mark and John,
>   Thanks for replying to my plea for help. Ideally, I would like to avoid
> running two sets of books or accounts. The extra work of entering the data
> twice eliminates the advantage of moving to GnuCash. We already have a
> marginally workable system that tracks the invoices separate from the books.
>
>   I would also like to avoid unposting invoices and reposting them after
> the year because that will mess with when they show up in the weekly
> amounts billed. That information is much more important to us on a daily
> basis than the tax information, which is only needed when I fill out the
> tax forms. However, given that the weekly amounts billed report only looks
> back four weeks, I could simply do that unposting and reposting after
> February 1, except that many of the invoices that were not paid as of
> January 1 would then be paid by then. Unposting and reposting a paid
> invoice is more involved, so I think I would like to avoid that.
>
>   So, unless I hear another great idea from someone else, I think I will
> end up recording a single transaction in the income category removing the
> sum total of unpaid invoices on the last day of the year. I will then
> record another transaction the following day restoring those totals. That
> way, when I run the reports for the taxes a few months later, the summary
> will show the amount paid that year, not the amount billed.
>
>
>   For what it's worth, because I don't see the "business" features of
> GnuCash as separate from the "accounting" features, GnuCash cannot
> "support" cash accounting in my eyes if the "business" features do not
> support it. Others are, of course, free to choose a different way to use
> the language, but that is what I mean when I say that GnuCash does not
> support cash accounting.
>
> Best,
> John
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