Change your accounting method

Choose Accrual or Cash under Settings → Invoicing → Accounting → Accounting method. You need permission to set up invoice integrations. A QuickBooks connection is not required to choose the method.

• Accrual recognizes invoice revenue when an invoice is finalized. Payments clear Accounts Receivable.
• Cash recognizes revenue and the tax portion when a payment is collected, including partial payments. Refunds reduce recognition when disbursed. Processing fees remain separate.

First-time setup

New businesses start with no accounting method selected. Select Cash or Accrual and click Save changes. Your first selection saves directly, without a switching confirmation. Save a method before connecting QuickBooks Online or Desktop. Existing businesses keep their saved method.

Until a method is selected, Essential uses accrual for reporting and accounting activity. Selecting a method preserves any existing transactions' treatment.

Save a change

1. Select the accounting method.
2. Click Save changes.
3. Review the confirmation and click Confirm change. Choose Cancel to keep editing without saving.

The change takes effect immediately. New accounting activity uses the saved method. Outstanding transactions keep their established treatment through collections, refunds, failures, and retries. Previously posted entries stay unchanged.

Switching does not convert your existing books or change your QuickBooks reporting preferences. Any accounting conversion or transition adjustments remain separate.

Reporting

Recognized revenue and tax reports use the selected business method for the whole requested period, including historical periods. The report shows its basis. Accrual uses invoice recognition dates; cash uses collection dates. Refunds reduce the appropriate period. Revenue excludes sales tax and keeps convenience fees separate from invoice revenue.

In cash-basis line-item reports, quantities follow the portion of revenue collected. For example, collecting half of a 10-unit invoice reports 5 units; collecting the other half later reports the remaining 5. Refunds subtract the corresponding quantity. These quantities measure recognized revenue, rather than units delivered. In accrual reports, the invoice period includes the units and a later refund subtracts its share of units in the refund period.

A historical report recalculated under a different basis does not rewrite posted journals. Around a switch, the report and previously posted books can therefore differ.

EA revenue answers use the same selected basis and exclude sales tax. If you explicitly ask for billed or invoiced totals, EA reports those amounts including tax and labels them separately.

Billed amounts, outstanding balances, payment speed, and job costing retain their operational meanings.

Related guides

• What syncs to QuickBooks
• Account mapping for QuickBooks