📍 Where can I find this module?
Main menu > Finance > Fiscal years
Introduction #
Cash basis accounting is a simplified accounting method in which transactions are recorded at the time of actual receipt or disbursement, rather than on the date the document (invoice, credit memo) is issued. This method is permitted in France for certain categories of businesses (BNC, micro-enterprises, certain BICs).
In Kafinea, cash accounting is enabled at the fiscal year level.
1. Enable cash basis accounting #
To enable this mode:
- Go to Finance > Fiscal Years
- Open the relevant fiscal year
- Check the box Cash Accounting
Important: This setting applies to the entire fiscal year. We recommend setting it when you create the fiscal year, before recording any transactions.
2. Differences from accrual accounting #
| Appearance | Accrual accounting | Cash accounting |
|---|---|---|
| Date written | Date of issuance of the document | Date of actual payment |
| Receivables and payables | Recorded as soon as they are broadcast | Recorded only upon payment |
| Complexity | More comprehensive, more complex | Simpler, less detail |
| Target audience | All companies | Professionals, small businesses |
3. How it works in Kafinea #
When cash accounting is enabled:
- Invoices and credit memos do not generate journal entries when they are issued
- Accounting entries are generated only when a payment is recorded
- Entries are recorded in the cash journal on the date of payment
Good to know: At the end of the fiscal year, it may be necessary to record any remaining receivables and payables in order to prepare the balance sheet. This adjustment can be made through manual entries.
4. Frequently Asked Questions #
Can I change the accounting mode during the fiscal year?
It is technically possible to change the setting, but this is strongly discouraged during the fiscal year because the journal entries that have already been generated will not be recalculated. Ideally, the accounting mode should be changed at the start of a new fiscal year.
Is cash basis accounting compatible with VAT?
Yes. Under cash basis accounting, VAT is reported on receipts (output VAT) and payments (input VAT), in accordance with the cash basis VAT system.
Which businesses can use cash basis accounting?
In France, this method is primarily used by self-employed professionals (BNC) and businesses subject to the simplified tax regime (BIC). Consult your accountant to verify your eligibility.