DX1 runs on an Accrual accounting basis recognizing Sales and COGS when a unit or part is sold.
Cash Accounting Vs. Accrual Accounting
Recognize income when money is received | Recognize income when sale is completed regardless of when money is taken |
Recognize expenses when money is spent | Recognize COGS when a unit is sold regardless of when the expense is paid for |
No Accounts Receivable | Tracks Accounts Receivable |
No Accounts Payable | Tracks Accounts Payable |
Taxes paid when money is received | Taxes accrue on current sales rather than money received |
Mostly used by small businesses and sole proprietors with no inventory | See IRS Publication 538 for requirements for accrual accounting https://www.irs.gov/pub/irs-pdf/p538.pdf |
