Cash basis
Counting revenue when money lands and expense when you actually pay. Simpler, and what most sole proprietors file on.
In Solo Superstars
Cash is a reporting view, not a second set of books. Profit-and-loss reports can be read on cash or accrual from the same entries; the Balance sheet and Trial balance always show the books as recorded.
On the Cash view:
- Invoice revenue appears on the date the customer’s payment was received, not the invoice date. A partial payment counts only the part that was paid.
- Bill expense appears on the date you paid the bill, not the bill date.
- Bank and card transactions you categorized straight to an income or expense account, with no invoice or bill behind them, appear on their bank posting date.
- A refund reduces revenue on the day the money went back to the customer.
- Moving money between your own accounts, loan principal, and owner contributions or draws never count as income or expense, even though cash moved.
The method you file taxes on is set separately under Settings › Tax profile. See accounting method.
Example
Harbor Lane Coffee, December:
| What happened | Cash view | Accrual view |
|---|---|---|
| Dec 20: invoice a hotel $3,000 for House Blend 1kg; paid Jan 10 | January revenue | December revenue |
| Dec 22: bill from Northgate Roasting $1,200; paid Jan 5 | January expense | December expense |
| Dec 27: café card sales $850 deposited, categorized as sales | December revenue | December revenue |
| December profit | $850 | $2,650 |
Nothing was entered twice and nothing is missing. The Cash view simply waits for money to move before counting it.
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
- cash method
- cash accounting
Related
- 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.
- 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.
- Payment date — The date money was actually paid or received.
- Income statement — Revenue, costs and expenses over a period, ending in net income. The report that says whether you made money.