Cash basis accounting recognizes income and expenses only when receiving or settling payments. By contrast, accrual accounting also considers receivables, payables, and provisions. Transactions are recorded even without money changing hands right away. What matters is that you make deposits and withdrawals at some point down the line. 

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The data collector and accounts manager handle cash basis accounting, while the budget planner and expense tracker are responsible for accrual accounting.

 

Anyone searching for a “data collector” label will look in vain. As MoneyLoupe’s home screen presents all collected data, it is evident that the home screen is the data collector. The data collector informs the user about the actual and planned payments and allows the recording of current income and expenses.

 

To access the accounts manager, budget planner, and expense tracker, tap Autopilot, the button at the bottom of MoneyLoupe’s home screen.

 

Unlike companies, households usually have nothing to do with receivables, payables, and provisions. Even reserves are not in play. At least not in the strict sense of the word.

 

In general, receivables or account receivables refer to the amount of money due to a company to deliver goods and services. These are open invoices that the company’s customers must pay at a particular time. Vice versa, payables or account payables are open invoices that a company still has to settle for goods and services. And while payables are always due, provisions are not. Finally, reserves are profits dedicated to a particular purpose. By doing so, companies keep funds from being used for other purposes, such as buying back shares.

 

Regarding MoneyLoupe’s philosophy, receivables are income that will be due. In other words, receivables are income planned but not yet realized. The following categories can be receivables: Paychecks, Side Hustles, Tangible Assets, Capital Gains, Government Grants, and Additional Benefits.

 

Payables are expenses that will be due. In other words, payables are non-discretionary expenses planned but not yet realized. Dwelling, Utilities, Groceries, Transportation, Insurance, Child Care, Debt Payments, and Savings may be payables.

 

Provisions are expenses that might be due. In other words, provisions are discretionary expenses planned but not yet realized. Consider Equipment, Clothing, Shoes, Beauty, Fitness, Entertainment, Vacation, Gifts, Donations, Business, and Miscellaneous as possible provisions.

 

Reserves are simply realized savings. By building up reserves, you set aside money for meeting unexpected emergencies, making major purchases, avoiding financial worries in retirement, or just ensuring the children’s college attendance. Although savings, aka reserves, are considered expenses in zero-based budgeting, it does not mean that you no longer dispose of that money.