Cash Basis vs Accrual Basis in Financial Reports

Several URBI financial reports let you switch between two accounting bases: Accrual and Cash. The basis you choose changes when income and expenses show up on the report, so the same property can look different depending on which one you pick. This guide explains what each basis means, which reports support the toggle, and exactly how cash basis decides what counts.

Who can see this: Any staff member, property manager, or board member with accounting access for the property. There is no resident-facing version.

The two bases in plain terms

• Accrual basis recognizes income when it is earned and expenses when they are incurred, regardless of when money actually moves. An invoice you raise this month counts as income this month even if the payer has not paid yet. This is the default and the basis your budgets are set on.
• Cash basis recognizes income and expenses only when money actually changes hands. An invoice raised this month but paid next month counts next month, when the payment settles.

Neither basis is more "correct" than the other; they answer different questions. Accrual shows what you have earned and owe; cash shows what has actually landed in and left your accounts.

Which reports support the toggle

Six reports are basis-aware and honor the Accrual / Cash toggle, including their comparison-period columns:

• Balance Sheet
• Income Statement
• Trial Balance
• General Ledger
• Equity Rollforward
• Budget vs Actual

Two reports are cash-only by design and do not offer the toggle, because they are inherently cash-based:

• Cash Flow Statement shows a banner reading "Presented on a cash basis."
• Reserve Fund report shows a banner reading "Cash-only report."

On Budget vs Actual, switching to cash basis shows an extra "Mixed-basis comparison" caveat. Your budget targets were set on an accrual basis, so comparing them against cash-basis actuals is indicative rather than a like-for-like comparison.

How cash basis recognizes money

When you switch a report to cash basis, URBI looks at every settled payment and allocates it back to the income or expense categories it belongs to, so your cash-basis Income Statement still reads by category rather than as one lump of cash.

• Settled payments only. Only money that has actually moved is counted. An unpaid invoice contributes nothing to cash-basis income until it is paid.
• Allocated to source categories. A payment against an invoice is traced back through to the revenue account behind the charge it paid, so the income lands in the right category. Expense payments are traced to the expense account they settle.
• Credits and write-offs are excluded. Applying a credit on account or writing off an invoice does not move cash, so those adjustments do not appear in cash-basis totals. They remain visible on the accrual view.

When you view a report on cash basis, a short explainer banner appears reading: "Viewing cash basis. Figures reflect settled payments only, allocated to their source categories. Credits and write-offs are excluded from cash totals."

Good to know

• Accrual figures never change. Switching to cash and back does not alter your accrual numbers; the two views are computed independently from the same underlying entries.
• Some cash cannot be traced to a single source category. When that happens it is not dropped or hidden; it appears as a clearly labeled suspense row. See Unallocated Cash and the Suspense Row.
• The modified-cash Balance Sheet balances. On cash basis the Balance Sheet excludes the receivable and payable accounts (money owed to or by you that has not settled) along with their income offsets, and still balances (assets equal liabilities plus equity).