Hey, it's Candus and I wanted to share with you
Cash versus Accrual reporting
So share with me, do you often look at your actual reports?
Do you go in and do you know the difference
between cash and accrual, I realized recently,
especially whenever I do my workshops
that this is something people don't understand
I thought it would be fun to just come on live and share it with you
So when you're pulling your reports, often people say to me, Candus,
I just entered in a bill, but it's not showing up
on my profit and loss
or I just created an invoice, but it's not showing up
and this all has to do with if you're using cash or accrual basis
and most people don't understand the difference
So I love to teach it. It's one of the things
one of the first things I usually teach in my workshops when I do them
So first, or when I work with private clients
So the first thing is, why is this important? The way that software works is
you can choose whether you want to look at a report in
QuickBooks on cash or accrual basis, so that it basically
picks the different features, right? So you guys know
there's different ways to enter in your income
and there's different ways to enter in your expenses
and depending on your business
some people want to pay taxes based of accrual basis
Some want to pay it based of cash, what the heck is the difference?
Can you please explain to me what you're talking about?
Yes.
Think of cash basis, as the moment money is exchanged
I pay you for the products or services that you pay
or you pay me for your products or services
Okay, that's cash basis, when money is actually exchanged
Hey, Christy, thanks for tuning in live
Accrual basis is at the moment you invoice your customer
or the moment you enter a bill
So I'm actually gonna, I'll share it with you guys the screen
real quick because it makes so much more sense when you can see it
you know what I'm talking about, right?
So, when you're in QuickBooks, and you go under reports, company & financial
profit and loss standard, and you're looking at your finances
and you want to see what's happened,
this is my training company file
on the desktop, I will show you on the online
as well in a moment, you're going to pick
I talked about all this in my workshops, usually, but you pick a beginning and end date
for your profit and loss but what a lot of people don't know
is the difference between cash or accrual
This little button over here
Okay, so cash, as I said is when money is exchanged
accrual is actually when you...
invoice your customer
Okay? So you'll notice on the profit and loss here
things changed
Do you see that?
So...
right now, it looks like this company for this year
This is just like an example that I did
has a net income of $997 on accrual basis
On cash basis, they've made $0, because there's no income,
because they haven't actually been paid for it
and if you guys want to know more about this
you can always join my workshop
I'm gonna be doing new workshops in September where I go in more depth
but, and I'll be doing some more lives here as well
but remember, when you enter a bill,
vendors are the people you spend money with
when you enter a bill, that's accrual basis,
it's not going to show up on your profit and loss
if you're on report basis until you actually pay it.
and the same is true with invoices
when you create the invoice and you do the sale,
it's going to show it as a sale
But until you actually receive the payment
it's not going to show up and often people go
oh my gosh, this is like the thing I haven't understood for so long
and then let me show you real quick on the...
let me click this real quick and I'll share my screen. Okay, great.
You should still be seeing my screen.
I'm gonna be doing a workshop soon
make sure you guys register I'll give you the link later
But if you are an online user, you go over to reports
so that you could see the difference between cash and accrual
Go under profit and loss
and then over here, on the left,
actually on this one, it's on the right, hold on,
I got all these extra little screens popping up I mean,
this is the difference between cash and accrual. So a lot of times people will realize
that their reporting has always been on accrual basis
But what they actually really want is cash
So you'll see this is your bottom line
And if we change it over to cash basis
I'm not sure this is a sample file, but it will exactly show
But see now it's in the whole negative $1900
When we're an accrual basis
it's positive 1600, so it does make a difference
Now where I love to teach you guys this more about
and we can, I can come back and do another training on it in the future is
I love to use cash basis to see like where if, since everybody's paid me
Where would I sit? And then I love to use accrual basis for
if all my invoices that I've invoiced to my customers have
been paid, if I paid all the bills that I've entered,
where would I be, and that's really what you can start using
The difference between cash and accrual basis for
is really understanding what's happening
Are you guys using
Have you been pulling your own profit and loss
and knowing the difference between cash and accrual basis?
Let me know in the chat
Is this something you're going to actually start implementing?
I'm sure you will cover this in the training
My program is defaulted to accrual
Yes
Not sure how to default it to cash
I will teach you guys that later It's actually a preference setting
under preferences actually, let me take
one moment, and I'll share actually, I can share with you later
but let me just share it now because that's what we're talking about
and then I'll be back So if you want to register
for the workshop, it's canduskampfer.com/coming
I just thought that would be easy
So if you go under edit, preferences,
and then you're going to go in
you need to be set up as an admin and you can go under reporting here
So you go edit, preferences, reports, and graphics
and right here, cash or accrual basis
and the same is true with the online
you can go under the preferences and change it
or you can manually change it
what I love to teach you guys and I'm realizing like
I had this like aha moment recently about
really
thinking about QuickBooks in such an absolutely different way
than you've been thinking about
because everybody thinks about QuickBooks is like this tax
It's right, like you just need to file your taxes
And I've been working with some businesses, especially with the
pandemic and people their bookkeepers are leaving,
or they're having to take things on, and really realizing like
mistakes that are being made and not really fully comprehending it
and I'll come back and share that with you guys
You can let me know but like
these aha moments of like, so many things
that I really want you guys to realize that QuickBooks can
benefit you that you may not even be seen
But you can always change it here
if you want to
change it permanently
that's when you go under the Edit, preferences. Okay.
So let me know, are you guys gonna go in and start checking this out?
What, have you been using this? Has it been helping you?
And let me add real quick for you a, the URL for coming to the workshop
I should have already typed it in, but I didn't
It's gonna be CandusKampfer.com
We're gonna be doing workshops in September
So some of you have been like Candus
what are you doing in your next workshop?
I will add that for you Okay
So this is what it's going to be Candus Kampfer coming
We'll be doing more URLs and stuff and you can register
this is just to let you know
about the actual workshops
It looks like this when you go there
coming soon and you can register
to be notified, you just click yay! I'm excited for workshops
and it will let you know
It'll also give you my tips and tricks
that I love to send out I'm actually going to send today's
out soon
and it's all going to be about
this cash versus accrual and some training on that
So let me know if you have any other questions
I will see you soon
I hope you are having a fantastic week
I literally sat down and I started realizing
how many things I want to share with you guys
So I'm gonna be doing a lot of Facebook Lives
So make sure you click on the little bell to be notified
and I will see you soon
Don't forget to register to be notified for the workshops
Let me know are you cash or accrual basis?
Is this something you understood before
How it impacted your profit and loss?
That accrual basis is when you invoice and when you enter a bill
and cash basis is when the money's actually exchanged
So you really can start using both
if you switch back and forth and you really understand how to use them
You'll have the data that you need
I keep looking at the wrong camera
I'm so sorry I have two cameras today
and I'm used to using this one So if it looks like I haven't been looking at you
It's just because
I'm getting used to a new camera
(Laughs)
anyways, I thought I was was talking to you, but I wasn't
So anyway
Hope you're having a fantastic day
Let me know if you're gonna implement this
and what was your favorite part of today's little mini training?
Talk to you soon
Bye
Until next time
Toodaloo