Cash and Accrual Posting

Using Accounting Schema

The purpose of this page is to help you support both Cash and Accrual based posting in iDempiere. Some smaller companies need to generate 'Cash basis' financials.

Please note that the below configuration needs to happen before you go live. Changing this configuration after you go live will have unintended consequences.

If you only need Cash reporting, you can uncheck the Accounting Schema window => Accrual field. After you restart your application server, the system will no longer post Invoice documents. Instead, the system will use the Allocation (View Allocation window) records to post what would normally happen at an Invoice.

If you need both Cash and Accrual reporting, then you need to create two Accounting Schema records - one for Cash and one for Accrual. Here are the instructions for creating a second Accounting Schema. Once this task is complete, the system will now post to both schemas simultaneously. You must choose the Accounting Schema when creating Financial Reports. Said another way, you create Financial Reports for each Accounting Schema. Note that it is possible to change the Accounting Schema before you run a Financial Report - doing so prevents the need for separate financials for each schema.

Using End of Period GL Journals

The below bullets describe how to update the financials of an organization whose Accounting Schema => Accrual field = 'Y' to reflect cash reporting. The below can be executed at any time after go-live.

• The adjustment and reversal GL Journals and their timing:
  • Use 12th period to create the 'Accrual to Cash' GL Journal adjustment as described below.
  • Use 13th period (12th adjustment period) to create the 'Balance Sheet => Current Income amount to Retained Earnings' GL Journal adjustment.
  • Use 1st period of the next year to reverse the 'Accrual to Cash' GL Journal adjustment.
• 'Accrual to Cash' GL Journal details:
  • Find 12th period AR balance (X) and create the following entry in the 12th period:
    • DR Income $X
    • CR AR Cash Basis Adjustment $X (use adjustment account because AR is document controlled)
  • Find 12th period AP balance (Y) and create the following entry in the 12th period:
    • DR AP Cash Basis Adjustment $Y (use adjustment account because AP is document controlled)
    • CR Cash Basis Adjustment Expense $Y (use a new account because the original expense could be anything)
  • Inventory - needs to be further discussed...