Balance sheet on cash basis for sole trader

[Thomi]

Self employed using cash accounting

How can I generate a balance sheet on a cash basis

[ian_roberts]

QuickFile doesn’t really do cash basis accounting, with the exception of the experimental cash-basis periodic report that is being developed for MTD income tax. All the standard reports are accruals basis, I suppose it might be possible to convert an accruals basis P&L to a cash basis one by

• disregarding the value of any unpaid sales or purchase invoices (or the unpaid portion of part-paid invoices - this gets complicated if the invoice is split across more than one nominal code), and
• assigning the value of any unallocated prepayments to the default nominal category of the client/supplier (if you’re VAT registered this would be the net value only, ignoring whatever proportion of the payment will end up as VAT)

but there’s nothing really built in to QuickFile that will do this for you, you’d have to assemble it from the CSV files in your account backup data.

I’m struggling to understand what a cash basis balance sheet would look like though. I mean you could work out your cash basis P&L and use that as the “P&L account” capital line at the bottom, but how do you adjust the other sections to make the sheet balance? The only place that makes sense is the debtors and creditors control accounts (since that’s what would be adjusted if you deleted the unpaid invoices/purchases entirely), but then that means you’re not showing your unpaid sales invoices as an asset or your unpaid purchases as a liability, and it’s not an accurate reflection of the financial state of your business…