Accrual basis
Counting revenue when you send the invoice and expense when you receive the bill, whether or not money has moved. The alternative is cash basis.
In Solo Superstars
Accrual is what the books record underneath: sending an invoice creates a receivable, receiving a bill creates a payable. The Cash view on profit-and-loss reports leaves out what has not been paid yet, so choosing a method is about how you read and file, not how you enter data.
Accrual answers “did this month’s work make money?” because the sale and the cost of making it land in the same month. Lenders, investors and financial-statement audits expect accrual.
Example
A $600 bill received in June and paid in July shows as June expense on accrual (2000 Accounts Payable holds it until paid) and July expense on cash.
Harbor Lane Coffee roasts a wholesale order in March using beans billed in March, but the café is paid in April. Accrual shows the sale and the bean cost together in March, so March’s margin is real. Cash would show the cost in March and the sale in April, making March look like a loss and April look unusually good.
Codes shown are the defaults a new workspace starts with. Yours may be renamed or renumbered — check Accounting › Chart of accounts. See the full default chart.
Also called
- accrual method
- accrual accounting
Related
- Cash basis — Counting revenue when money lands and expense when you actually pay. Simpler, and what most sole proprietors file on.
- Book basis — How the books themselves are recorded. Solo Superstars keeps one double-entry ledger on accrual; cash reports are calculated from it rather than kept as a second set of books.
- Reporting view — Whether a profit-and-loss report counts revenue and expenses on cash or accrual timing. It changes how the report reads, never what the books contain.
- Accounting method — Cash or accrual: the basis your business files its tax return on. Set in the tax profile, separately from how reports open by default.
- Accounts receivable — Invoices you have sent that customers have not paid yet. An asset, because the money is coming.
- Accounts payable — Bills you have received but not yet paid. A liability until the money leaves your bank.