All the other financial tools I’ve found that work on cash basis sales
ERPNext does not offer any cash basis reporting.
But the issue is looking at the P&L, I can’t find a way to show cost centers in the P&L for comparison. I’d like a general P&L that shows the company as a whole, but like maybe cost center across the top where year is right now. I can’t find a way to add that column.
This doesn’t exist out of the box but should. And it wouldn’t be on a cash basis.
If you don’t need to manage inventory, you don’t need ERPNext and should use QB. If you do need inventory, you should be keeping accrual books. I promise that your current approach will be frustrating, inaccurate or both.
I’m told there are things you can do to use ERPNext in a cash basis:
Use Sales Orders to request payment, then create Sales Invoice when paid.
Don’t maintain inventory on all items (if you wish) and use a “Purchases Expense” account when purchasing items. Again Create Purchase Invoice When Paying.
This creates the scenario where cash is equivalent to accrual, but it’s forcing an accrual bookkeeping system into a specific shape solely for the purposes of reporting. You can claim that that “works”, I will argue that that it’s materially incorrect.
A more comprehensive solution would be to write cash basis reports. There is currently no direct connection from the allocation field on the Payment Entry Reference to the amount and account fields on a Purchase Invoice Item or Sales Invoice Item.
I agree with creating Cash Basis reports. If we ignore Cash Basis businesses, many will miss out on all the glory. Perhaps a custom module will also be helpful.
The overlap of “cash based businesses” and “those with inventory requirements” is vanishingly small. There has to be enough enterprise to justify the hassle of an ERP. A custom module is a reasonable approach, but the fact that it isn’t being asked for demonstrates the actual demand.
I helped some friends set up ERPNext for cash-basis accounting at their organization. Generally, I agree it’s not worth the effort, but they had other process controls that were complicated enough to benefit from Frappe.
I’m definitely no accountant, and I don’t know if what they did was materially correct or incorrect, but their needs were simple enough that I’m not sure it matters.
All that said, @jfreak53, I’ll reiterate what I said above, which is that I’m skeptical ERPNext will be a good fit for you. It appears from this thread that you’re still new to double entry accounting, which is great, but ERPNext assumes a good understanding. It won’t stop you from making mistakes the way quickbooks will, and I’d say there’s a good chance you realize a year from now that you’ve entered everything incorrectly.
Thanks! Really the only thing missing for me, forget cash basis, I’ve figured a work around, is the ability to show cost centers in P&L. If I can get that to work it’ll be great!