Disclaimer: The information provided here is for educational purposes only and does not constitute legal, accounting, or tax advice and shouldn’t be used as a substitute for professional advice tailored to your specific circumstances.
Overview
When it comes to keeping track of your business's books, there’s two methods – cash and accrual accounting. Understanding each form of accounting is key, especially when it comes to tracking assignable gift cards and sales in your Boulevard dashboard.
Accrual-based accounting
Accrual-based accounting tracks a sale the day a client purchases something from your business. Purchases made with account credit or with a gift card, will all show on the day the client redeems the balance, not on the day that the account credit or gift card was purchased. In fact, because gift cards are not associated with any kind of service, they will not show up on the Sales report when it's run on an accrual basis.
TIP: If your business sells gift cards or offers account credit, it’s recommended you check with your accountant to see if it’s best for your business to use accrual-based accounting. Why? Accrual is an accounting system designed for account balances that are added to and then paid off.
Cash-based accounting
Cash-based accounting tracks a sale the day your business was paid for it with a cash based payment method like cash, check or credit. So, if a client buys something on account credit or with a gift card, then there is no sale to track because no money was received. A cash-based report shows the money earned when a client purchases the gift card, but does not show the products or services that are purchased with the gift card.
TIP: Cash-based accounting is not as robust as accrual-based, and not designed to handle gift cards and account credit. If you offer gift cards or account credit, it’s recommended you check with your accountant to see if accrual-based accounting is a better fit for your business.