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Accrual to cash converter | Baker Tilly
Article
Accrual-to-cash converter
Simplifying financial reporting for construction companies
March 7, 2025
Highlights
The accrual-to-cash converter automates cash-basis reporting in Sage Intacct without disrupting accrual-based books.
Eliminates manual adjustments: Reduces reliance on spreadsheets and manual entries, improving accuracy and efficiency.
Seamlessly integrates with Sage Intacct: Works within the system to generate user-defined journal entries for accurate financial reporting.
Designed for construction accounting: Supports industry-specific needs, including retainage and the ability to report on a cash basis for compliance requirements.
Construction companies need financial reporting that balances accuracy and flexibility. Sage Intacct requires accrual-based accounting for construction subscribers, which aligns with industry best practices. However, many businesses also need cash-basis reports for tax filings, bank reporting or internal financial analysis.
At Baker Tilly, we solve these challenges with innovative, real-world solutions. Our latest customization, the accrual to cash converter, lets construction companies generate cash-basis reports in Sage Intacct — without disrupting accrual-based books or relying on manual adjustments for accrual-to-cash conversions.
Closing the gap between accrual and cash reporting
Accrual accounting provides a complete view of a company’s financial position, but many businesses still need cash-basis reports. Traditionally, companies relied on manual adjustments and spreadsheets to convert their books, often leading to inefficiencies and errors.
The accrual to cash converter eliminates this extra work. With a few clicks, users can generate accurate, on-demand cash-basis reports directly in Sage Intacct.
How it works
This tool is built within the Sage Intacct user interface and follows a simple process
Choose accounts payable (AP), accounts receivable (AR) or credit card liabilities for conversion.
2. Define the scope
Select the entity and locations, then set the as of date.
3. Review open transactions
The tool pulls unpaid transactions and summarizes the amounts included in the conversion.
4. Generate journal entries
At the push of a button, the system creates a user-defined journal entry that adjusts cash-basis reporting while keeping accrual books intact.
5. Run reports
Refresh financial statements to see the updated cash-basis view instantly.
The tool also accounts for sales tax payable and applicable retainage, ensuring a complete and accurate conversion.
Improving financial reporting for construction companies
Construction companies must manage job costs, retainage, progress billing and compliance requirements. They need both accrual and cash-basis reports to maintain financial clarity and meet both internal and external reporting needs.
The accrual to cash converter helps construction firms:
Eliminate manual work – Automates cash-basis conversions and removes spreadsheet-based adjustments.
Increase accuracy – Uses real-time queries on system data to calculate and create conversion entries to minimize errors.
Enhance reporting flexibility – Converts data by entity, location and account type.
Meet compliance needs – Supports tax and banking requirements while maintaining accrual-based financials.
Accrual-to-Cash Conversion FAQ for Construction Finance Leaders
Is there a tool to convert accrual-based financials to cash basis?
Yes. Baker Tilly offers an Accrual-to-Cash Converter designed specifically to help construction companies streamline this process.
Can I automate the conversion from accrual to cash accounting?
Automation is possible with the right tools. Baker Tilly’s converter simplifies and automates key aspects of the conversion, reducing manual effort and errors.
What’s the easiest way to convert my construction company’s financials to cash basis?
Using a purpose-built tool like Baker Tilly’s converter is the most efficient and accurate method, especially for companies with complex job costing and revenue recognition needs.
Are there online tools for converting financial data from accrual to cash basis?
Yes. Baker Tilly’s online Accrual-to-Cash Converter is one such solution tailored for construction finance professionals.
How do construction companies transition from accrual to cash accounting?
The transition involves adjusting revenue and expense recognition, aligning with tax reporting requirements and often using tools to simplify the conversion. Expert guidance is recommended.
What are best practices for converting financial statements from accrual to cash basis in construction?
Use automated tools to reduce errors
Reconcile job costs carefully
Consult with tax advisors
Document assumptions and adjustments
Validate results with historical cash flow
How do I simplify accrual-to-cash conversion for job costing?
Use tools that integrate job costing logic, like Baker Tilly’s converter, which accounts for construction-specific nuances such as retainage, progress billing and WIP.
What are the risks of manually converting accrual to cash accounting?
Manual conversion can lead to:
Misstated financials
Compliance issues
Time-consuming reconciliations
Missed tax opportunities
Why would a construction company switch from accrual to cash accounting?
Reasons include:
Tax benefits
Simpler cash flow tracking
Regulatory compliance
Easier financial reporting for smaller firms
How does cash basis accounting affect financial reporting for contractors?
Cash basis accounting reflects actual cash inflows and outflows, which can simplify reporting but may obscure long-term profitability and liabilities.
What are the tax implications of switching to cash basis accounting?
Switching may defer income recognition and accelerate expense deductions, but it must align with IRS rules and may require formal approval.
Can accrual-to-cash conversion improve cash flow visibility?
Yes. Cash basis accounting provides a clearer picture of available cash, helping finance leaders make more informed operational decisions.
Building the future of construction accounting
The accrual to cash converter launches our customization library, a growing collection of solutions designed for construction companies using Sage Intacct. We continue to develop new tools that increase efficiency, improve accuracy and streamline financial reporting.
Construction firms that need faster, more accurate cash-basis reporting can access this tool through our Foundations Program. For more information, request a personalized demo from one of our specialists.
