The importance of accrual accounting
The term “accrual” is refers to any lone-recorded entry of revenues of expenses, even in the absence of a cash transaction. Accrual accounting, therefore, is a method of recording finances chosen by companies that want to match their revenues to their expenses. The idea is that a transaction is recognised the moment that it occurs, rather than the moment when money is paid or received. For example, if a customer purchases an item from a store and plans to pay it off over a period of 6 months, the transaction is recognised as a complete once-off payment that matches the value of the product no longer owned by the business. Therefore, regardless of when the cash is actually fully received, the totals will balance in the company’s books. This method is ideal for businesses to gain an accurate financial overview.
Choosing QuickBooks for your business’s accounting software can help you to perform accrual accounting and record your transactions quickly and easily. Our selection of accounting software comprises three packages designed that suit various business accrual accounting needs: SimpleStart, Pro and Premier packages. Learn more about accrual basis of accounting on our website.
Is accrual accounting the right choice for your business?
Even though accrual accounting is a standard accounting practice utilised by many companies, there are businesses that prefer using other methods. An advantage of effective accrual accounting is that you have an accurate overview of your current financial condition in comparison to transactions only recognised when there is cash present. Accrual accounting is more expensive to implement and more complex, but is favoured amongst larger companies.
With effective accounting software such as QuickBooks, you can set up charts of accounts using the tutorial as a guide to see when your post transactions are already set up to debit and credit the correct amounts. If your business needs constant assessments or you need to present spreadsheets on how well your business is doing, accrual accounting is ideal for your company.
QuickBooks can help your accrual accounting process
Knowing where your business stands financially can support you when making further decisions and prevent losses from increasing. When using accounting software, the accrual basis is utilised to help you to gain a broad understanding of the big picture.
QuickBooks provides a range of software packages that are fit for your financial management needs. Our easy-to-follow software includes tutorials that assist your learning process. With our accounting solutions, business owners no longer have to spend large sums of money on training sessions or hiring accountants; they can simply purchase QuickBooks to implement an efficient accrual accounting system.
Browse our packages to learn about the different options and how each can benefit your business. Alternatively, you can contact us with questions regarding which of our products is best suited to your accounting system.