Cash to Accrual · Bahrain
From cash-basis records to accounts that hold up.
Cash accounting tracks your bank account. It does not tell you what you have earned, what you owe, or what you are owed. SRR converts cash-basis records to the accrual basis, so your accounts can be reported, audited, and trusted.
What We Handle
The whole conversion, explained.
A conversion moves income and costs into the periods they belong to. Done properly, it is a correction. Done badly, it is a mess an auditor will find.
- Conversion of cash-basis records to the accrual basis
- Recognition of receivables, payables, and accruals
- Prepayments, deferred income, and provisions
- Inventory and cost of sales recognition
- Restatement of comparatives for a clean opening position
- IFRS-compliant records that can be reported and audited
Who It Is For
When cash accounting stops being enough.
You are facing your first audit
Cash-basis records cannot be audited into IFRS financial statements. The conversion has to happen first, and it is better done deliberately than in a panic.
You have crossed the VAT threshold
VAT does not follow your bank account. Once you are registered, cash-basis records stop being adequate.
A bank or investor wants real accounts
Cash-basis numbers tell a lender or investor almost nothing about profitability or obligations. They will ask for accruals.
The numbers stopped making sense
Cash accounting flatters a good month and punishes a bad one. Once the business has real credit terms and stock, it stops reflecting reality.
How It Works
A conversion you can explain to an auditor.
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Assess the starting point
We review the cash-basis records and identify what is missing from an accrual view: unbilled revenue, unrecorded liabilities, stock, and prepayments.
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Build the accrual position
We recognise receivables and payables, accruals and prepayments, deferred income, and provisions, so the accounts reflect obligations rather than payments.
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Restate and reconcile
We restate the comparatives and reconcile the conversion, so the opening position is clean and the movement is explainable to an auditor.
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Run it properly from here
We set up the ongoing bookkeeping on the accrual basis, so you do not slide back into cash accounting a quarter later.
Common Questions
Cash to accrual, answered.
What is the difference between cash and accrual accounting?
Cash accounting records a transaction when money moves. Accrual accounting records it when the transaction actually happens: revenue when it is earned, cost when it is incurred, regardless of when the payment lands. Accrual gives a true picture of profitability and of what the business owes and is owed.
Why do we need to convert?
Because financial statements in Bahrain are prepared under IFRS, and IFRS requires the accrual basis. If you need audited statements, or accounts a bank or investor will take seriously, cash-basis records will not get you there.
What actually changes in the numbers?
Usually quite a lot. Revenue you have earned but not yet been paid for appears as a receivable. Costs you have incurred but not yet paid appear as liabilities. Stock stops being an expense at the point of purchase. Profit in any given period can move significantly, and that is the point: it becomes accurate.
Will the conversion change our profit?
Very likely, and often materially in the year of conversion, because income and costs are being moved into the periods they belong to. That is not a problem, it is a correction, and it should be explained clearly rather than buried.
Can you keep running the books afterwards?
Yes, and it is usually the sensible route. A conversion followed by a return to cash-basis habits achieves nothing. We set up the ongoing bookkeeping on the accrual basis and keep it there.
Part of our wider services for businesses in Bahrain and the GCC. See also financial statement preparation and bookkeeping in Bahrain.
Get onto a basis that actually works.
A short call is the quickest way to scope the conversion and understand what it will change in your numbers.