This presents a challenge for U.S. tax accountants and the bookkeepers who have to work with them. The vast majority of small businesses file on a cash basis, yet we can only produce an accrual basis trial balance report.
Fortunately, there’s a simple workaround.
Here’s how to produce a cash basis trial balance in Xero:
Go to Reports > All Reports
Select General Ledger
Use the following settings:
Dates: Select the appropriate fiscal year date range. In this example, I’m using a 2017 calendar year.
Sort by: Account Code
Check the Cash Basis and Show YTD boxes.
You should be looking at a General Ledger Summary report with six columns.
The YTD Balance column represents the cash basis trial balance values. Positive values are debits, and negative values are credits.
The Opening Balance column represents the trial balance at the beginning of the period, which you could use to make a comparative trial balance report.
To separate the trial balance into separate debit and credit columns, use Excel or Google Sheets.
Select Export on the bottom right of the screen to view the report in Google Sheets.
Add columns for debits and credits, and use a formula to populate it.
In this case, I used:
- H8: =IF(F8<0,"",F8)
- I8: =IF(F8>0,"",-F8)
And then I copied the formula down the rows.
Let’s hope Xero upgrades the Trial Balance report soon to enable cash basis.
If you’d like to add your voice to this feature request, head over to the Xero Business Community topic, “Trial Balance - Option to run on a cash basis” to add your vote and comments.