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Cash Basis Accounting

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Posted on by Joan Bonilla

Dear All,

My customer is an ONG which has the accounting principle of the cash basis instead of the accrual basis.

Could anyone confirm if this accounting principle is eligible in D365FO? If so, could you explain how to set it up?

Basically, the revenues and expenses are recognize when the payment is received, not when the invoices are posted.

Many Thanks in advance,

Joan

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Ramit Paul 22,803 Most Valuable Professional on at

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Cant you just create management reporter to have your PL and BS report there?

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Joan Bonilla 20 on at

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Hi Ramit,

Thanks for your answer. How would you implement that in MR?

Regards

Joan

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Ludwig Reinhard Microsoft Employee on at

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Hello Joan,

Can you explain what you use the abbreviation ONG for?

Also, can you give us a brief outline of what transactions you plan to record in D365FO?

(sales orders, purchase orders, etc.)

Many thanks,

Ludwig

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Joan Bonilla 20 on at

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Hi Ludwig,

Thanks for your prompt response.

ONG: NGO (I just typed it in Spanish by mistake, apologies)

Basically this NGO is a projects-based company. They receive and manage donations to fund fixed price projects. They will use all the transactions from the projects and accounting module (timesheets, fee journals, expense journals etc), as well as purchase requisitions and purchase orders. Public Sector module will be activated.

So they told me that they recognize the revenue when they collect the money from the customer payment journal, not when they post the invoice. Same with the procurement end.

Many thanks in advance for your help, and please do not hesitate to ask me any further doubts

Regards

Joan

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MM-20051452-0 Microsoft Employee on at

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Hi Joan,

Customers require Cash Basis accounting usually depends on General Ledger & Cash & bank management to fulfill their requirements. However, we can follow with multiple workarounds based on Projects & Procurement processes that will require some manual follow ups.

- For project transactions (Revenues & expenses), you can use Fixed Project types and setup with WIP accounts and on monthly basis you can transfer the settled transactions to P&L.

- For General vendor expenses, you can use the Vendor invoice register to update accruals accounts and with payment, post Vendor invoice approval with method of payment cash.

Regards,

Momen Mansour

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Joan Bonilla 20 on at

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Hi Morem,

This solution sounds promising. I will test it and let you know. If you or anyone else have more ideas that could help, please let me know

Many thanks

Joan

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