PSA L&P - Account Balance: Why an unpaid bill will not show in the account's balance when following the cash method of accounting

Why an unpaid bill will not show in the account's balance when following the cash method of accounting

The cash method of accounting is based on the check date.

In the cash method (as compared to the accrual method) an unpaid bill has no effect on any account balance until the bill is paid or is partially paid.

If there is a need to accrue expenses before the bill is paid you could change to the accrual method of accounting. Or you can create a Journal Entry in the month you want the expense to accrue and then reverse the journal in the following month (click the Insert Reversing Journal Entry into Next Month checkbox in the upper right of the journal entry screen. 

Only the ParishSOFT IT team can make this change to your software from cash to accrual, and it will change EVERY bill that has ever been entered.  As such, reports for closed periods will most likely change as the invoice date dictates when expenses are incurred in accrual. 

 

 

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