This special topic takes you through the steps necessary to create a cash basis billing. Cash basis billing is most often used in United States government 1443 billing for "large" businesses, but can be used for other purposes as well.
Cash basis billing requires that no bills can be submitted to your customer until you have paid the supplier for those goods and/or services. Cash basis billing applies only to Accounts Payable transactions. General Ledger journal entries, labor costs, direct travel costs, and any items held in your company's inventory are treated as if already paid. Please check your contract for particulars.
Select the Bill Cost Incurred on Cash Basis check box in the Project Billing Info screen (Projects » Billing » Billing Master or Projects » Project Setup » Revenue Setup) if you would like to bill your project on a cash basis. Verify that cash basis billing is required per the terms of your contract.
Identify the accounts to which you wish to apply cash basis rules. You can do this in two ways. You can use the Maintain Billing Accounts screen (Projects » Billing » Controls) to identify the cash basis accounts on a company-wide basis, or you can use the Cash Basis subtask of the Project Billing Info screen to set up the accounts by project.
After posting all the transactions, you will need to run the Update Cash Basis Information screen (Projects » Billing » Prepare Billings). This process uses the accounts payable tables to determine payment status and updates the Cash Basis Information subtask of the Maintain Open Billing Detail screen (Projects » Billing » Prepare Billings) with payment information.
Calculate billings as usual and complete the billing cycle.