General Ledger - Understanding Cash Accounting Behavior in Acumin

When an environment is configured as Cash Accounting in Acumin, only cash‑based activities generate accounting entries. Revenue and expenses are recognized strictly when cash is received or paid. This is the standard configuration for most U.S. law firms, as Cash Accounting aligns closely with how legal services are billed and collected in the U.S. market.

This means:

• Issuing a client invoice does not create revenue until payment is collected.

• Recording a supplier invoice does not create an expense until it is paid.

• Reports such as Accounts Receivable (AR) and Work in Progress (WIP) are updated for tracking purposes but do not represent posted GL activity until cash is involved.

Billing and Accounts Receivable
When you bill a client, Acumin does not post any accounting transaction because no cash has been received. However, AR reports are updated so the firm can monitor outstanding balances and collections.

Unbilled Disbursements
Unbilled disbursements follow the same cash‑basis logic. When an unbilled disbursement is recorded but not yet paid (for example, through an Accounts Payable invoice), no entry is posted to the Unbilled Disbursement GL account.
However, Work in Progress is immediately adjusted, allowing the disbursement to be billed even before it is paid. These amounts will appear in WIP reports until the related cash transaction occurs.

Typical Accounting Entries for Unbilled Disbursements under Cash Accounting

Summary
Under Cash Accounting, Acumin records accounting transactions only when actual cash movements occur. Billing activity and unbilled disbursements affect WIP and AR reports for operational tracking but do not post to the general ledger until payment is made or received. This ensures that financial statements reflect true cash flow while still allowing the firm to effectively manage work in progress and receivables.

ADDITIONAL DOCUMENTS:

Why Acumin Does not Journalize Unbilled Time Entries