Wave offers both Accrual- and Cash-Basis reporting. All reporting in Wave defaults to Accrual-basis accounting but you can toggle to Cash-basis anytime you need from within your reports!
What are accrual- and cash-basis reporting?
Accrual-basis reporting allows you to report on all of your transactions, including those which are due but not yet received or paid (Accounts Receivable/Payable).
Cash-basis reporting, allows you to see your business activity without any Accounts Receivable income or Accounts Payable expenses.
If you're not sure which type of accounting is best for your business it may be best to speak with an accountant about your options!
How is cash-basis calculated in Wave?
Our cash basis reporting includes all cash transactions, as well as credit card transactions, other short-term and long-term assets (like employee receivables and capitalized equipment), and other short-term and long-term liabilities (like sales tax payable and loans). We include credit card transactions because they are treated as cash expenditures for tax purposes, i.e. you deduct the expense when you charge the purchase, not when you pay the card balance. The other assets and liabilities reflect activity based on cash transactions, even if there isn’t an income statement impact.
Where do I find it?
If you head to Reports and click into a report, you can change the accounting basis at the top of the report:
You can also click the question mark icon to gain some quick insights into the different types of accounting if you need a reminder!