As you may know, Cash accounting is very simple… money comes in and money goes out. Simple. Accrual is much more complex and is a better method of accounting. But what that means is being able to recognize expenses and revenues when they are earned and not necessarily when they are paid. I don’t expect the software to know how to do this, but it can definitely assist. Some items to help with this:
- Tracking and scheduling prepaid expenses
- Tracking and scheduling unearned revenue
- Change the date of single transaction to reflect the date when it is earned. (e.g. bought a plane ticket in February, but the flight doesn’t take place till September… recognizing the expense to take place in September and the prepayment sits in the balance sheet until then)
And track all of these items in an easy to read report.