📋 Requirements
Before you begin, make sure:
You have access to Company Settings.
You have permission to manage Finance Settings.
Understanding Cash vs. Accrual Accounting
Buildern supports two accounting methods for calculating project financials:
Cash Accounting - Under the Cash method, revenue and expenses are recognized only when money is actually received or paid.
This means:
Revenue is recorded only after customer payments are received.
Costs are recorded only after bills or expenses have been paid.
This method provides a view of actual cash flow but may not fully reflect the current financial performance of a project if there are outstanding invoices or unpaid bills.
Accrual Accounting - Under the Accrual method, revenue and expenses are recognized when they are earned or incurred, regardless of when payment is made.
This means:
Revenue is recorded as soon as an invoice is approved.
Costs are recorded as soon as a bill or expense is approved.
This method provides a more complete view of project profitability because it reflects work that has already been completed, even if payment has not yet occurred.
ℹ️ Note - Accrual accounting is the standard accounting method used under GAAP because it matches revenue and expenses to the period in which they occur.
How to Change the Accounting Method
To configure your accounting method:
Go to Settings.
Select Company Settings.
Open the Finance tab.
Under General Settings, locate the Accounting Method setting.
Choose either:
Cash
Accrual
Save your changes.
ℹ️ Note - This is a company-wide setting. Changing it affects how financial metrics are calculated across all projects.
How the Accounting Method Affects Project Financials
The selected accounting method determines how Buildern calculates cost and revenue throughout the platform, including:
Budget tab
Project Dashboard financial widgets
Cash Method - Only the paid portion of approved transactions is included in financial calculations.
For example:
If a bill is partially paid, only the amount that has been paid is counted.
If an invoice is partially paid, only the amount received is counted.
Accrual Method - The entire approved amount is included in financial calculations, regardless of payment status.
For example:
Approved bills count as project costs immediately.
Approved invoices count as project revenue immediately.
Example
Assume the following approved transactions exist for a project:
Subcontractor Bill: $20,000 approved, $12,000 paid
Customer Invoice: $35,000 approved, $15,000 received
Metric | Cash Method | Accrual Method |
Cost | $12,000 (paid amount) | $20,000 (approved amount) |
Revenue | $15,000 (received amount) | $35,000 (approved amount) |
Under the Cash method, Buildern displays only the money that has actually changed hands.
Under the Accrual method, Buildern displays the full value of approved work, regardless of payment status.
What Happens After You Change the Accounting Method?
Switching between Cash and Accrual recalculates your existing project financial metrics using the newly selected accounting method.
No transactions are modified - the setting only changes how Buildern calculates and displays financial data throughout the application.
ℹ️ Note - If you're unsure which accounting method is appropriate for your business, consult your accountant before changing this setting.
You're ready to go! Continue exploring Buildern to discover more tools that can help simplify your construction management.
Happy building!