How to Change to Cash Basis on Quickbooks

By Pam Durant

There are two main types of financial reporting methods available within QuickBooks--accrual and cash basis, which reflect the two main types of accounting methods used to calculate a business's taxable income. Choosing the accrual method means that your company's financial position will be determined by including "receivables" (monies expected but not yet received) and "payables" (monies due but not yet paid) for the period as well as transactions that have cleared the bank. Cash basis reporting will count income and expense transactions only after money has exchanged hands. The accrual basis is most common, but a company may choose to report their financials using either method. QuickBooks allows for seamless transition between the two.

Things You'll Need

  • Computer
  • QuickBooks financial software program

Setting Preferences

Step 1

To set cash basis as the default reporting method, choose Preferences from the Edit menu and click on Reports & Graphs.

Step 2

On the Company Preferences tab, select the radio button next to Cash under Summary Reports Basis. Click OK.

Step 3

Run a Profit & Loss Standard Report to confirm cash basis by clicking on the Reports menu, then choosing Company & Financial, and then Profit & Loss Standard.

Step 4

Type in the dates for the desired period in the From and To sections to view cash basis data.

Modifying the Report

Step 1

Regardless of the method chosen in your Preferences settings, you can always view one method or the other by modifying the report. From a Profit and Loss report window, click the Modify Report button and then choose Accrual or Cash in the Report Basis section to view the report as desired.

Step 2

To save the chosen settings in the report for future use, click on the Memorize button from the report window. Customize the report name if desired and choose the report group to save it in.

Step 3

Recall the memorized report by clicking on the Memorized link in the top right hand corner of the Report Center.