Cash or accrual
Your accounting basis decides when a dollar counts: the day you earned it, or the day it landed. It is one setting, it applies to your whole organization, and it quietly determines what most of the reports in Books tell you.
Growth and up to read basis-aware statements; the setting itself lives in
Settings → Finances → Books and needs accounting.manage. New
organizations start on accrual.
The difference, in one job
One job, invoiced at the end of August and paid in early September, with a fuel bill against it. Same events, two answers:
| What happens | Accrual | Cash |
|---|---|---|
| You send a $4,800 invoice on 28 August | Revenue in August | Nothing yet |
| The customer pays it on 4 September | Nothing further | Revenue in September |
| A $600 fuel bill arrives on 30 August | Expense in August | Nothing yet |
| You pay that bill on 9 September | Nothing further | Expense in September |
Neither column is more correct. Accrual tells you what a month earned; cash tells you what it banked. A seasonal landscaping business usually wants the first to run the business and the second to survive February.
Which reports follow it
Every card in Reports, every KPI tile and every report masthead carries one of five claims, and the same five words appear in Books Overview and in Settings. The claim says what the figure was computed on, so a “Cash basis” tile next to an “Accrual basis” card is a difference you can see rather than one you have to know about.
| Claim | What it means | Reports that carry it |
|---|---|---|
| Cash basis / Accrual basis | Follows your default, and the toggle on the report lets you read the other one | Profit and loss · Trial balance · Balance sheet · Owner’s equity · Revenue summary · Expense summary |
| Cash basis (fixed) | Money that moved, whichever basis you are on | Cash flow (operational) · 1099-NEC |
| Accrual basis (fixed) | The posted record itself, which a basis is applied to | General ledger · Statement of cash flows · Expenses by vendor · the journal · account registers |
| As of a date | A balance on one day, not a period; the basis does not change it | A/R aging · A/P aging · the hub’s Outstanding A/R tile (“As of today”) |
| Job costing | A job’s own economics, never a books total. All three come from the job-cost engine: labor is time entries × each worker’s rate, costs are the expenses, bills, vendor credits, bank splits and materials tied to jobs, revenue is what was billed to them, all on document dates; overhead is not allocated. No basis applies, and the books - native or QuickBooks - are never read | Job summary · Estimated vs actual · Profitability |
| Operational | Counted from the documents and the schedule, not from the ledger | Crew performance · Payment discrepancies · Cost of payments · Sales tax liability |
Two of the fixed-accrual reports deserve a word:
- Statement of cash flows is always accrual. It is built by the indirect method, which starts from accrual net income and adjusts - run it on a cash basis and it degenerates into a list of zeroes.
- General ledger and the journal are the accrual record itself. They show what was posted, which is what a basis is applied to.
The “What’s the difference?” link beside every basis toggle, on the Books settings card and on the Overview masthead opens the one-job example above, and names your current default.
Changing it
The switch is in Settings → Finances → Books. It takes effect immediately and applies to every basis-aware statement from that moment.
Switching changes what your reports have already told you. It moves no journal entries - the ledger is append-only, and the basis is applied when a statement is built - but last month’s profit will read differently the moment you switch. Change it before you file, not after, and tell whoever does your taxes.
Closing entries stay out of the P&L
When you close a year, LawnLedger posts an entry that zeroes revenue and expense into retained earnings. Those lines are flagged, and the income-statement family - profit and loss, cash flows, owner’s equity - excludes them, so a closed year keeps its own P&L intact instead of netting to nothing.
The balance family - trial balance, balance sheet, retained earnings, account registers - includes them, because retained earnings has to be a real funded account there.