The two settings that change every figure

Before you start: open any report under Accounting.

Can’t find one? It may be turned off for your business, or your account may not be allowed to open it. Ask the person who set up your FeePrime. They can fix both.

Every accounting report in FeePrime asks you the same two questions before it gives you a number.

Get them wrong and you do not get an error. You get a different answer that looks perfectly reasonable and is wrong for what you asked.

Chart of accounts

Either OHADA or none.

OHADA gives you the numbered accounts your accountant and the authorities in the OHADA region expect. What customers owe you, what you owe, your sales and your costs all land in the accounts they are supposed to.

None gives you the same underlying figures without those account numbers.

If you operate in the OHADA region, pick OHADA and stay with it. Switching halfway through a year gives you two sets of reports that are each correct and cannot be compared with each other.

Cash or accrual

This one changes when things count. It is the setting people misunderstand most.

   CASH      counts when the money moves
             invoiced in March, paid in May -> it counts in May

   ACCRUAL   counts when you earned it
             invoiced in March -> it counts in March, paid or not

Neither is wrong. They answer different questions.

Cash tells you what actually happened to your money. Accrual tells you what the period really earned and really owed.

Here is the visible effect. Invoices only create accounting entries in accrual. In cash, nothing happens until money moves.

So a business with a good month of unpaid invoices looks quiet in cash and healthy in accrual. Both are telling the truth.

Currency, again

Every report takes a currency. Run it one currency at a time.

A report that mixes them is adding up things that cannot be added.

Pick once, and write it down

The damage here is not one wrong report.

It is two reports, produced weeks apart with different settings, compared as if they described the same thing.

So decide your chart and your basis with whoever does your accounts. Write the decision down somewhere a colleague will find it. Then use it every time.

And if you do deliberately change it, say so on whatever you send out.

Try it

On staging.feeprime.com, run the same income statement for the same period, once in cash and once in accrual, for a period with unpaid invoices in it.

Seeing two different correct answers is what makes this lesson stick.