You can determine whether your reporting is generated via a Cash-Based or Accrual System.
Cash-Based Accounting - Reports income when you receive payments from the customer. This method recognizes revenue when cash is received and expenses when cash is paid out.
Accrual-Based Accounting- Reports income when you bill a customer. Under this method, an expense is recognized upon the obligation to pay it.
Please consult your accountant if you have any questions regarding which method you should choose.
To choose your accounting method:
Click Business Tools > Billing Manager from the left navigation menu.
Click Billing Setup.
From the General Settings tab, under Account Method, select either Cash or Accrual.
When finished, click General Settings.