Cash basis accounting

Hi Kevin,

Perfect timing! Our Development team have just released this feature.

You can now choose between Cash Basis (money in/out) and Traditional (accruals) basis (invoice/bill dates) when sending quarterly updates to HMRC. To do so, if you head to Dashboard > MTD for income tax > Click Preview beside a quarter > You can then select Cash/ Accruals basis.

For cash basis, Clear Books will include income and expenses based on the date that they are paid. Any unpaid income or expenses will be excluded from the quarterly update.

Tommy

Thank you that's great. I was however also hoping for an option in clearbooks itself so that the reports such as profit and loss etc are in cash basis too? otherwise they are not much use to keep track of things.

I work in the wedding industry and invoice a year or more ahead of the due date, they pay an amount of the total as a deposit and then a month before the wedding. Sometimes they pay smaller amounts throughout the year which I take off the total.

Many thanks Kevin

Hi Kevin,

No problem at all, and I see. P&L on cash basis is something we have on the backlog.

In the meantime, you can use the Cash Flow report which will show income and expenses on cash basis.

Tommy

Okay thanks. If I date the invoices ahead of time would that work, ie not show as an income until that date comes?

Many thanks Kevin

Hi Kevin,

Yes, that is correct, the income will only show on the payment date for cash basis.

Tommy

Thank you so much, this works!