Cash Basis Accounting in Datatech

Accrual Vs. Cash Basis Accounting Systems

Datatech software runs on an accrual accounting system by default. This means that revenues are recorded when they are earned and expenses are recorded when they are incurred. Accrual accounting provides a more comprehensive view of your business’s overall financial performance. When using accrual accounting, income and expenses will be recorded when invoices are entered.

Cash basis accounting records income and expenses only when cash is exchanged. Some businesses choose to use cash basis accounting for a clearer picture of their current cash flow.

There are cash basis legacy options that some users are still using; however, they are no longer supported. If a user still has their program set to post based on cash basis, they cannot obtain accrual financial reports.

Cash Basis Legacy Options

• Cash Basis – Daily – Legacy: The Daily Legacy option runs all transactions and reports using cash basis accounting from the start. It will not post invoices to an income account until those invoices are paid. This option is no longer supported by Datatech software.

• Cash Basis – Standard – Legacy: For the Standard Legacy option, any financial statement that has a checkbox for “Cash Basis Report” can be run on cash basis.

Review Cash Basis Journal Transactions Option

The Review Cash Basis Journal Transactions option is the best and most current option to use when doing cash basis accounting.

This option involves generating transactions after every report that is selected as Cash Basis. For a more in-depth review of this feature, see Review Cash Basis Journal Transactions.