- We record expenses at the moment of payment since most are purchased
online, invoiced, and paid at the same time.
- But regarding income, we always invoice customers first, and record
receivable when doing the invoicing. I know how to make an invoice
with GnuCash and how to do a transaction between the receivable asset
and current asset later.
You are on accrual (because of how the income side is handled).
You say that expenses are booked at purchase time AND immediately paid
for. But that is still consistent with accrual. Accrual allows for a
difference in time between when an expense is occurred and when paid
for. But it does not require a difference in time. Essentially, when
there is no difference in time the differences between "cash" and
"accrual" disappear.
If you are using accrual but reporting on a cash basis, before each
filing you need adjustment transactions. You run the report for filing,
then reverse these transactions. Not such a terribly big deal if you are
filing quarterly (or annually), etc. UNLESS perhaps some of the income
or expense accounts are line items on the filing. In that case you need
to track more than just "gross income not yet received" and "gross
expenses not yet paid" << the still unposted accounts receivable andÂ
accounts payable >> If line items are involved, then you will have to
look at the individual invoices not yet posted to create the adjustment
transactions.
Michael D Novack
PS -- depending on work flow, you might be able to take care, for
example, that there are no outstanding payables right before reporting.
In other words, cut the checks for anything that would affect a line
item. For example, I kept books for non-profits. Major filing is annual
and "printing and postage" is a line item on the 990/990-EZ. So I would
make sure there was no unpaid bill for printing or postage of say 12/30
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