When you run financial reports - especially the Income Statement and Budget vs Actuals - you choose an accounting basis. That choice controls when income and expenses appear on the report, not whether the underlying books are correct.

Vlge supports three bases: Accrual, Cash, and Hybrid. All three read from the same general ledger. They just apply different timing rules.

Quick comparison

TYPE	Accrual	Cash	Hybrid
Revenue (assessments, fees)	When charges are posted	When payments are received	When payments are received
Expenses (vendor bills)	When bills are approved	When bills are paid	When bills are approved
Expenses (direct bank categorization)	When the entry is posted	When the entry is posted	When the entry is posted
Best for	Formal, GAAP-style reporting	“What came in and went out this period”	Day-to-day board reports (Vlge default reco)

Accrual

Income when billed; expenses when incurred.

Revenue

Assessment and fee income appears when the charge is created and posted to the ledger - typically when dues are run, a fine is issued, or a charge is added manually. It does not wait for the owner to pay.

Example: June dues are posted on June 1. They appear on a June Accrual report even if nobody pays until July.

Expenses

Vendor bill expenses appear when the bill is approved in Pay Bills, not when it is paid and not necessarily on the bill’s due date.

Example: A $1,000 landscaping bill is submitted May 30 with a due date of June 1. If it is approved in May, it shows on May Accrual reports. If approved in June, it shows in June - regardless of when cash actually leaves the bank.

When to use Accrual

You want formal financial statements aligned with standard accounting
The board cares about obligations and earned income, not just bank movement
You are comfortable explaining receivables (money owed but not yet collected)

Cash

Income when collected; expenses when paid.

Revenue

Assessment and fee income appears when owner payments are received - online payments, ACH, card, and recorded payments with a payment date in the period.

Example: A owner pays June dues on June 25. That payment appears on a June Cash report, even if the charge itself was posted earlier.

Expenses

Vendor bills (Pay Bills workflow)
Expenses appear when the bill is marked paid - based on the payment journal entry date, not the due date or the date you matched the bank transaction.

Example: A $1,000 landscaping bill is approved in May but paid June 12. On a Cash report it appears in June, when the money went out.

Direct bank categorization
If you categorize a bank transaction directly to an expense account (without going through Pay Bills), that expense appears when the categorization entry is posted - usually the transaction date.

Example: A $25 postage charge categorized from the bank feed appears on the Cash report for the month that entry is dated.

Important: Pay Bills vs manual categorization

How you handled it	What Cash basis sees
Pay Bills → approve → mark paid → (optionally) match bank	Expense on payment date
Categorize bank transaction directly to an expense	Expense on categorization date

Do not do both for the same outflow. If a bill was paid through Pay Bills, match the bank transaction to the bill - don’t categorize it again as a separate expense.

When to use Cash

You want the Income Statement to reflect money collected and money spent in the selected date range
You are comparing reports to bank activity for the month
You are not yet focused on formal accrual reporting

What Cash is not

Cash basis is not a literal bank statement export. Timing can still differ slightly (Stripe deposit dates vs payment dates, etc.). For a line-by-line view of the bank account, use Transactions / the bank feed.

Hybrid

Collected assessments; expenses when incurred.

Hybrid combines the two approaches:

Revenue: same as Cash - when owners pay
Expenses: same as Accrual - when bills are approved

Why Vlge recommends Hybrid for most self-managed associations

Treasurers often care about two different questions:

“How much did we actually collect this month?” → Cash-style revenue
“What bills did we take on this month?” → Accrual-style expenses

Pure Cash can make expenses look artificially low in a month when big bills were approved earlier but paid later. Pure Accrual can make revenue look wrong in a month when assessments were posted earlier but collected later.

Hybrid avoids both problems for typical monthly board reporting.

Example (same month, different pictures)

Event	Date	Accrual	Cash	Hybrid
June dues posted	June 1	Revenue ✓	—	—
Owner pays June dues	June 25	—	Revenue ✓	Revenue ✓
Landscaping bill approved	June 5	Expense ✓	—	Expense ✓
Landscaping bill paid	June 12	—	Expense ✓	—

For a June 1–30 Income Statement:

Accrual: dues revenue (posted June 1) + landscaping expense (approved June 5)
Cash: dues revenue (paid June 25) + landscaping expense (paid June 12)
Hybrid: dues revenue (paid June 25) + landscaping expense (approved June 5)

None of these is “wrong.” They answer different questions.

⭐️ Which dates matter (common confusion)

Field	Drives report timing?
Charge due date	No - not directly
Bill due date	No - not directly
Bill approval date	Yes - Accrual & Hybrid expenses
Bill payment / mark-paid date	Yes - Cash expenses (Pay Bills)
Owner payment date	Yes - Cash & Hybrid revenue
Bank transaction date	Only if you categorized the transaction directly

Rule of thumb: For Pay Bills, the report cares about approve (Accrual/Hybrid) or pay (Cash), not the due date on the invoice.

⚡️ Setting your default

Go to Financial Settings and choose a default Reporting basis. You can also override the basis each time you generate a report from the Financial Reports page.

Suggested starting point:

Your priority	Start with
Monthly board packet, self-managed HOA	Hybrid
Reconciling to the bank / “what moved this month”	Cash
Formal year-end or audit-style statements	Accrual

You can switch bases on the same date range to compare - the numbers should differ. That’s expected.

👉 Reports affected

The accounting basis applies to:

Income Statement (P&L)
Budget vs Actuals

It does not change:

Balance Sheet (always point-in-time balances)
Bank transactions / reconciliation (actual bank activity)
Unit balances and charge ledgers (always reflect what is owed and paid regardless of basis)

📝 Practical tips

Use Pay Bills for vendor expenses when you can - it keeps A/P, payments, and reports aligned.
Match bank transactions to bills after payment instead of categorizing the same outflow twice.
Use manual categorization for items that never go through Pay Bills (small purchases, processing fee credits, etc.).
Pick one basis for monthly board meetings and stay consistent month to month so trends are comparable.
Use Cash or the bank feed when the question is strictly “did money hit the account this month?”

🔍 FAQ

👉 Why does my Cash report show different revenue than Accrual?
Accrual counts income when charges are posted. Cash counts income when payments arrive. If owners pay late, Accrual shows income earlier.

👉 Why did a bill I paid in June show on a different month?
On Cash, it uses the payment date. On Hybrid/Accrual, expenses use the approval date. If those fall in different months, the report month changes.

👉 I matched the bank transaction to the bill - why does that matter?
Matching links the bank line to the bill payment so Vlge knows the outflow is already accounted for. It prevents duplicate expense entries and keeps reconciliation clean.

👉 Should we ever use Accrual before we’re “in the green”?
Accrual is fine whenever the board wants obligation-based reporting. Many treasurers prefer Hybrid until delinquencies are under control, because revenue on the report matches collections, which is easier to explain to the board.