Accrual-to-Cash Converter
Businesses switching from cash to accrual accounting, preparing for a bank loan (which typically requires accrual-basis statements), or undergoing due diligence use this prompt to produce restated financials. It's also used by founders who keep books on cash basis but need accrual statements for investors or lenders.
Prompts
You are a senior technical accountant specializing in accounting method conversions for [BUSINESS TYPE] businesses under [ACCOUNTING STANDARD]. I will provide financial figures on a cash basis; convert them to full accrual basis per [ACCOUNTING STANDARD] principles. Conversion period: [PERIOD] | Currency: [CURRENCY] Cash-Basis Financial Data: [CASH BASIS DATA] Adjustment balances at period end: - Accounts receivable: [AR BALANCE] - Accounts payable: [AP BALANCE] - Prepaid expenses: [PREPAID BALANCE] - Accrued liabilities: [ACCRUED LIABILITIES] - Deferred revenue: [DEFERRED REVENUE] - Inventory change (if applicable): [INVENTORY CHANGE] Perform the conversion in this format: 1. **Conversion Framework** - Explain the cash vs. accrual difference and why it matters for [BUSINESS TYPE] - State the core formula: Accrual Revenue = Cash Receipts + Ending AR − Beginning AR 2. **Revenue Adjustments** - Add ending AR (earned, not yet collected) - Subtract prior-period AR collected this period - Subtract deferred revenue (cash for unearned future services) - Add prior-period deferred revenue now earned - Show each item with amount and one-line explanation 3. **Expense Adjustments** - Add ending AP (incurred, not yet paid) - Subtract prior-period AP paid this period - Subtract prepaid expenses (paid but future-period benefit) - Add prior-period prepaids now expensed - Add accrued liabilities (incurred, not yet invoiced) - Adjust for inventory change if applicable 4. **Restated Financials** — side-by-side table: | Line Item | Cash Basis | Adjustments | Accrual Basis | Include Revenue, COGS, Gross Profit, major expense categories, Operating Income, Net Income. 5. **Journal Entries** — one debit/credit entry per major adjustment, labeled AJE-1, AJE-2, etc. 6. **Materiality & Caveats** - Flag adjustments moving net income by more than 10% - Note where more data is needed (long-term contracts, multi-period projects) - State that tax or audit-purpose conversions require CPA review
Prompt Variables
Replace each placeholder with your specific information:
[BUSINESS TYPE][ACCOUNTING STANDARD][PERIOD][CURRENCY][CASH BASIS DATA][AR BALANCE][AP BALANCE][PREPAID BALANCE][ACCRUED LIABILITIES][DEFERRED REVENUE][INVENTORY CHANGE]What You'll Get
A side-by-side cash vs. accrual comparison table for the income statement, detailed line-by-line adjustment explanations, journal entries for each adjustment, and a materiality assessment flagging any conversion item that moves net income by more than 10%.
💡 Pro Tip
Provide the prior period-end balances for AR, AP, and prepaid expenses as well as the current period — the conversion requires both beginning and ending balances to correctly isolate the current-period accrual impact from amounts carried over from the prior period.
Compatible AI Tools
Claude
Best for conceptually complex conversions involving deferred revenue or multi-period contracts; Claude will explain each adjustment in plain terms alongside the numbers and flag adjustments that are material enough to warrant CPA review.
ChatGPT
Use the Code Interpreter to paste cash-basis figures as a CSV — ChatGPT will perform the arithmetic accurately and output a formatted comparison table. Ask it to show all formulas used for auditability.
Gemini
Good for Google Sheets users — you can reference your cash-basis P&L in a sheet tab and ask Gemini to output the restated accrual figures into an adjacent column with adjustment notes.