[GNC] Cash flow basis (vs accrual basis) reporting

[Todd Gould]

David (and all),

Thank you for your thoughtful and insightful responses.

However, from these responses, it seems that I have either not stated my
question/need as clearly as I should have or that I have unintentionally
confused the issue with my unfortunate use of 'flow' in proximity to 'cash'.

I will try to restate for hopefully better clarity....

1. I am both familiar with and understand the fundamental accounting
differences between Accrual basis and Cash basis accounting
2. Our business model requires Accrual based accounting (GnuCash default -
good!) treatment for our daily operations.  Invoicing (and the
subsequent delay in payment) as well as Payroll Expense (and the shift in
time from when work is performed from actual payroll cycle) are 2 very
common and prominent examples of needs for this.
3. For tax purposes (as well as a few other reporting requirements) we
report on a Cash basis
4. I'm not interested in maintaining two separate sets of books (one for
Accrual and one for Cash basis)
5. I'm not interested in simply getting closer to a Cash basis by delaying
entering of whatever transaction until payment is received or made.  This
would be both a high likelihood of error in our case as well as also
fundamentally work against our genuine need for accurate Accrual based
books as stated in 2) above.

So, what I ideally want/need is the ability to run reports (P&L and Balance
Sheet mostly) on both an Accrual as well as Cash basis.  I am familiar with
QuickBooks capability to toggle between those 2 'modes' directly within a
given report.  This would be ideal for simplicity, but if I can run
both reports directly, albeit separately, that is also fine.

I see that reports can be customised, via ... "Guile, GNOME's
implementation of Scheme, which again is a LISP-like programming language,"
according to the documentation.

However, it is unclear just how far that can go?  Does anyone have any
experience with using these report customization capabilities to enable the
retrieval of the requisite data as well as processing of that data to
arrive at the ability to produce the necessary Accrual and Cash basis
reports from the same GnuCash file?  If not, is there even a best
guess from anyone who may have dabbled with these capabilities in the past?

I am potentially willing to collaborate and/or contribute the fruits of
my/our efforts back to the community for its benefit.  However, I don't
want to unnecessarily go down a rabbit hole if someone could perhaps
already tell me that this is likely not possible for example.

Thank you all again kindly for your time, insights and assistance!

Todd

On Tue, Mar 11, 2025 at 12:34 PM David Cousens <davidcousens49 at gmail.com>
wrote:

> Todd,
>
> The major difference between cash and accrual accounting is to do with
> the timing of when you record events in your book, i.e. the dates at
> which you record the transaction. The primary aim in accrual accounting
> is so that any expenses and the income earned from incurring those
> expenses are recorded in the same accounting period irrespective of
> when the money/cash actually changes hands. An invoice is usually
> issued when the work earning the income is done/completed and the
> income is recorded in your books at the date of issue of the invoice.
> That is one of the objectives of the invoice and the accounts
> receivable system, it provides recording of income at the time of issue
> of the invoice, not when payment of the invoice is received. When you
> issue the invoice is under your control not GnuCash's.
>
> With expenses in accrual accounting, they will not necessarily be
> recorded as expenses at the time at which you pay for the goods but
> might, for example, be recorded as an asset "inventory" on purchase and
> then the expense will be recorded against the inventory at the time you
> do the work for a particular job, i.e. when the expense is incurred in
> earning income.  Again a purpose of the accounts payable is to maintain
> that separation in timing of the recording of the actual incurring of
> the expense and making the payment for it.
>
> In cash accounting the taxation authority does not require you to
> maintain that relationship between income and expenses in your books
> and the income and expenses are generally recorded in your books at the
> time payment is made or received rather than when the work earning
> income or incurring expense is actually performed.
>
> It is not what GnuCash does with the data internally that is different,
> just the dates/timing at which you make entries, create invoices etc
> into your books that are the difference. The specific rules of course
> depend on the legislation in your jurisdiction, usually the applicable
> taxation legislation.  While GnuCash is set up to support accrual
> accounting with the business features, it can equally be used for cash
> accounting but then some of functions the business features are then
> not necessarily going to work as you would expect them to with accrual
> accounting, e.g. control of ageing of receivables, control of some
> aspects of cash flow etc.
>
> David Cousens
>
>
>
> On Tue, 2025-03-11 at 09:27 -0600, Todd Gould wrote:
> > My apologies for the confusing wording.  I do mean cash basis.
> >
> > Sadly, we do also need to invoice, so.... the question remains
> >
> > On Tue, Mar 11, 2025 at 9:15 AM Michael or Penny Novack via gnucash-
> > user <
> > gnucash-user at gnucash.org> wrote:
> >
> > > On 3/10/2025 7:03 PM, Todd Gould wrote:
> > > > I have noticed various older historic discussions regarding the
> > > > lack of
> > > the
> > > > ability to perform Cash Basis reporting - especially for small
> > > > business
> > > > purposes.
> > > >
> > > > Is this feature on the development radar anywhere?  How can we
> > > > get it
> > > > prioritized more highly please?
> > > >
> > > a) You CAN use "cash basis" even for small business/organizations.
> > > The
> > > only PITA is unable to use invoicing (except by work arounds). If
> > > your
> > > small business does not do much invoicing, the work around not too
> > > cumbersome.
> > >
> > > b) But you said "cash FLOW basis". Gnucash can do cash flow
> > > reporting
> > > but that has nothing to do with cash FLOW.
> > >
> > > Michael D Novack
> > >
> > >
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