Accrual vs Cash Basis

There are two primary methods for recording income and expenses. The method you choose affects when transactions appear in your reports.

Cash Basis

Revenue is recorded when cash is received. Expenses are recorded when cash is paid.

Example: You send a $5,000 invoice on January 15. The customer pays on February 10. Under cash basis, the revenue is recorded in February.

Best for: Small businesses and solopreneurs who want simple bookkeeping that matches bank activity.

Accrual Basis

Revenue is recorded when earned (e.g., when an invoice is issued). Expenses are recorded when incurred (e.g., when a bill is received), regardless of when payment happens.

Example: Using the same scenario, the $5,000 revenue is recorded in January when the invoice is issued.

Best for: Businesses that need a more accurate picture of financial performance, or that are required to use accrual accounting by tax authorities.

Which Should You Use?

• Many tax jurisdictions require accrual basis above a revenue threshold
• Cash basis is simpler but can hide timing issues (e.g., large unpaid invoices)
• dubbl supports both methods - your reports can be generated on either basis

In dubbl

dubbl records all transactions on an accrual basis by default (invoices create journal entries when issued). Reports like the Profit & Loss and Balance Sheet reflect accrual accounting. Cash-basis reports filter to show only transactions where payment has been received or made.