USA Post an accrual acct on a cash basis?


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I'm a bookkeeper who's done my share of basic accounting and have worked with small firms for the most part. Sometimes these companies/non-profits are tiny -- and I'm doing oversight where someone on staff posts the entries and I come in on a regular basis to adjust and do anything else above their level (payroll/reconciliations/JE's, P&L's, balance sheets, etc.)

I've had the following issue with more than one accrual company -- some of these companies/non-profits don't have that much activity. They get a few bills in and pay them right away. Or they get checks for work done, gather them up and in a few days deposit them. No invoices were issued -- but they would normally be invoice material. Do I need to follow accrual rules in these cases? Always posting bills they get as payable and then paying the bill -- even though they might be paying it the same day they got the bill? As opposed to just paying it on a cash basis out of the bank register? And always posting receipts in the A/R or as Sales Receipts and then receiving payment and depositing? As opposed to just taking it in on a cash basis into the register? Note that if there is a bill that won't be paid for a while, I'd always enter it as a payable. Or if monies won't be received for a period of time an invoice is always posted. . But is it acceptable to mix and match?

I ask this because I'm often working with people who have no training and for those not familiar with a/p, a/r and undeposited funds it makes things more complicated and prone to error. And if things were simpler it would keep their costs down both for staff and my services. But if it's considered sloppy work -- I'll keep doing it the more formal way.

Thanks for your help.
 

Fidget

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Usually you're either doing cash accounting or accruals accounting rather than a mish-mash of both.
 
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kirby

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The formal bookkeeping process of recording a receivable or payable then relieving the accrual is just that: a bookkeeping process. The accrual method requires unsettled transactions to be recorded at balance sheet date. Direct entries to cash do not violate the accrual method. Just inquire if there are any unsettled transactions and record them and you are OK.
 
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Thank you both for your replies. This has really helped. I picked up Kirby's option and proposed it to one small non-profit so far -- it will save them both time and money.
 

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