Learn how Cash and Accrual Accounting work in RMS, how they affect when revenue and expenses are recognised, which features are available, and which reports are best suited to each method.

Overview

RMS supports two accounting methods: Cash Accounting and Accrual Accounting. The method you choose determines when revenue and expenses appear in your reports, which accounting features you can use, and how your accountant will reconcile RMS with your general ledger.

Because this choice affects your financial reporting and compliance, you should always discuss it with your accountant before selecting or changing your Accounting Method in RMS.

• Changing from Cash to Accrual (or the reverse) after you are live may require adjustments to your reporting and processes.

• If you need to change your Accounting Method, contact RMS Support for guidance.  Fees may apply.

What is Cash Accounting?

With Cash Accounting, you record transactions when money actually changes hands. Revenue is recorded when you receive payment, and expenses are recorded when you pay them.

In RMS, revenue is recognised on the Accounting Date of receipt. It does not matter when the original charge was added; what matters is when the payment is entered. Expenses work the same way: they are recognised when you record the cash payment in RMS, not when you first receive an invoice or create an expense charge.

Key Points

• Revenue is reported when receipts are created.

• Expenses are reported when payments are made.

• Focuses on actual cash flow in and out of your business.

• Typically easier to reconcile directly to bank statements.

Example

If a guest stays this week but pays next month, the revenue from that stay is recorded next month, when you enter the receipt. If a supplier sends you an invoice today but you pay it next month, the expense is recorded next month, when you record the payment.

What is Accrual Accounting?

With Accrual Accounting, you record transactions when they are earned or incurred, even if payment happens later. Revenue is recorded when you provide the service or stay, and expenses are recorded when you become liable for them.

In RMS, revenue is recognised on the Accounting Date of the charge. When you post a room charge or other revenue item to a guest account, that is the date the revenue is reported, regardless of when the guest pays. Expenses are recognised when you create the expense charge in RMS, not when you eventually pay the supplier.

Key Points

• Revenue is reported when charges are created.

• Expenses are reported when expense charges are created.

• Focuses on when revenue and expenses occur, not when paid.

• Provides a more complete view of earnings and obligations.

Example

If a guest stays this week but pays next month, the revenue from that stay is recorded this week, when the charge is created on the account. If a supplier invoice arrives today but you pay it next month, the expense is recorded today when you enter the expense in RMS.

How the Methods Differ in RMS

The main difference between Cash and Accrual Accounting in RMS is timing. Cash Accounting looks at when receipts and payments are created, while Accrual Accounting looks at when charges and expenses are created.

Under Accrual Accounting, RMS can also track amounts that are still outstanding. Features such as Accounts Receivable, Balance Transfers, Charge Redirection, Transfer to Guest Account, and Split Rates are available and work as expected because the system can record charges that are not yet paid. When you use Cash Accounting, these features are not available, as all revenue is tied directly to receipts rather than to unpaid charges.

In practice, Cash Accounting is usually simpler to understand and easier to match to bank statements, but it does not show you who still owes you money or what you still owe to others. Accrual Accounting requires a little more understanding but gives your accountant the information they need to produce full profit and loss and balance sheet reports, including outstanding debtors and creditors.

Key Differences

Cash Accounting

• Revenue and expenses follow receipts and payments.

• Does not support Accounts Receivable and related features.

• Simpler, cash‑flow–focused reporting.

Accrual Accounting

• Revenue and expenses follow charges and expense entries.

• Supports Accounts Receivable and transfers/redirections.

• Better suited to full financial statements and more complex operations.

Which Reports Work Best for Each Method?

Many RMS reports can be used under either method, but some are more suitable for cash-based or accrual-based reporting.

Recommended Reports for Cash Accounting

If you are using Cash Accounting, the most useful reports are those that focus on receipts, payments, and cash movement.

Helpful Reports for Cash Accounting

• Cash/Charge Report with Report Type: Cash Report.
  Shows revenue based on receipts, ideal for daily cash and banking reconciliation.

• Cash Transaction/Till Reconciliation reports.
  Show money taken and paid out per shift, user or till, to balance cash drawers and POS.

• Receipts/Payment Method reports
  Help you match RMS receipts to bank statements and merchant settlements.

• Banking/Deposit Reports.
  Group receipts into deposit batches, making it easier to reconcile RMS with actual bank deposits.

These reports give you a clear view of when money was received and paid out, which is the focus of Cash Accounting.

Recommended reports for Accrual Accounting

If you are using Accrual Accounting, you will tend to focus more on charges, revenue recognition, and outstanding balances.

Helpful Reports for Accrual Accounting

• Cash/Charge Report with Report Type: Charge Report.
  Shows revenue based on charges, aligning with when stays and services are earned.

• Revenue by Charge Date/Stay Date reports.
  Help you analyse revenue for a specific period (e.g. monthly P&L), regardless of when payments are received.

• Accounts Receivable/Debtors Reports
  Show outstanding balances for guests, companies and agents, including ageing.

• Owner and Trust Accounting Reports (if applicable)
  Provide accrual-style visibility over owner income, fees and distributions.

Using Both Perspectives

Even if your property uses one main accounting method, it can be useful to view your data from both angles:

• Properties using Accrual Accounting often:

  • Use Charge Reports and revenue-by-date reports for financial statements.

  • Use Cash Reports and receipts-based reports for daily banking checks.

• Properties using Cash Accounting may:

  • Use Cash Reports for official figures.

  • Use Charge Reports and revenue-by-date reports to understand trends and forecast future revenue.

Thinking of “cash view” and “accrual view” as two different lenses on the same activity can make your reporting more flexible and informative.

In practice, many properties:

• Use charge‑based reports for period performance and forecasting.

• Use receipt‑based reports for day‑to‑day cash and banking checks.

Summary

Choosing or Changing Your Accounting Method

Your Accounting Method in RMS is a key configuration choice. It affects how revenue and expenses are recorded and which accounting features are available. It also determines how easily your RMS data can be matched to the reports your accountant prepares.

Your Accounting Method affects:

• How revenue and expenses are recorded in RMS.

• Which accounting features you can use.

• How your accountant or bookkeeper reconciles RMS to your general ledger.

Because this setting has wider financial implications, you should always consult your accountant before choosing a method or requesting a change. If you decide that a different method would suit your property better, contact RMS Support so we can guide you through the implications for your reporting and day‑to‑day processes.

• Changing from Cash to Accrual (or the reverse) after you are live may require adjustments to your reporting and processes.

• If you need to change your Accounting Method, contact RMS Support for guidance.  Fees may apply.